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Is USAA NASDAQ-100 Index Fund (USNQX) a Strong Mutual Fund Pick Right Now?

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Investors in search of an Index fund might want to consider looking at USAA NASDAQ-100 Index Fund (USNQX - Free Report) . While this fund is not tracked by the Zacks Mutual Fund Rank, we were able to examine other factors like performance, volatility, and cost.

History of Fund/Manager

USNQX finds itself in the USAA Group family, based out of San Antonio, TX. The USAA NASDAQ-100 Index Fund made its debut in October of 2000 and USNQX has managed to accumulate roughly $1.75 billion in assets, as of the most recently available information. Brent D. Reeder is the fund's current manager and has held that role since December of 2006.


Investors naturally seek funds with strong performance. This fund has delivered a 5-year annualized total return of 14.51%, and it sits in the top third among its category peers. Investors who prefer analyzing shorter time frames should look at its 3-year annualized total return of 17.1%, which places it in the top third during this time-frame.

When looking at a fund's performance, it is also important to note the standard deviation of the returns. The lower the standard deviation, the less volatility the fund experiences. The standard deviation of USNQX over the past three years is 14.9% compared to the category average of 7.63%. Over the past 5 years, the standard deviation of the fund is 14.92% compared to the category average of 8.93%. This makes the fund more volatile than its peers over the past half-decade.

Risk Factors

One cannot ignore the volatility of this segment, however, as it is always important for investors to remember the downside to any potential investment. USNQX lost 50.21% in the most recent bear market and underperformed its peer group by 4.49%. This makes the fund a possibly worse choice than its peers during a sliding market environment.

Even still, the fund has a 5-year beta of 1.17, so investors should note that it is hypothetically more volatile than the market at large. Another factor to consider is alpha, as it reflects a portfolio's performance on a risk-adjusted basis relative to a benchmark-in this case, the S&P 500. USNQX has generated a positive alpha over the past five years of 3.34, demonstrating that managers in this portfolio are skilled in picking securities that generate better-than-benchmark returns.


Costs are increasingly important for mutual fund investing, and particularly as competition heats up in this market. And all things being equal, a lower cost product will outperform its otherwise identical counterpart, so taking a closer look at these metrics is key for investors. In terms of fees, USNQX is a no load fund. It has an expense ratio of 0.48% compared to the category average of 0.76%. USNQX is actually cheaper than its peers when you consider factors like cost.

While the minimum initial investment for the product is $3,000, investors should also note that each subsequent investment needs to be at least $50.

Bottom Line

Want even more information about USNQX? Then go over to and check out our mutual fund comparison tool, and all of the other great features that we have to help you with your mutual fund analysis for additional information. Want to learn even more? We have a full suite of tools on stocks that you can use to find the best choices for your portfolio too, no matter what kind of investor you are.

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