On the lookout for a Mutual Fund Equity Report fund? Starting with USAA Small Cap Stock Fund (USCAX) is one possibility. USCAX bears a Zacks Mutual Fund Rank of 2 (Buy), which is based on nine forecasting factors like size, cost, and past performance.
History of Fund/Manager
USCAX is a part of the Victory family of funds, a company based out of Columbus, OH. USAA Small Cap Stock Fund debuted in August of 1999. Since then, USCAX has accumulated assets of about $566.09 million, according to the most recently available information. The fund’s current manager is a team of investment professionals.
Of course, investors look for strong performance in funds. This fund has delivered a 5-year annualized total return of 6.07%, and it sits in the top third among its category peers. If you’re interested in shorter time frames, do not dismiss looking at the fund’s 3-year annualized total return of 4.94%, which places it in the middle 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. Compared to the category average of 21.51%, the standard deviation of USCAX over the past three years is 27.19%. The standard deviation of the fund over the past 5 years is 24.04% compared to the category average of 19%. This makes the fund more volatile than its peers over the past half-decade.
Investors should note that the fund has a 5-year beta of 1.16, which means it is hypothetically more volatile than the market at large. Alpha is an additional metric to take into consideration, since it represents a portfolio’s performance on a risk-adjusted basis relative to a benchmark, which in this case, is the S&P 500. The fund has produced a negative alpha over the past 5 years of -3.36, which shows that managers in this portfolio find it difficult to pick securities that generate better-than-benchmark returns.
Investigating the equity holdings of a mutual fund is also a valuable exercise. This can show us how the manager is applying their stated methodology, as well as if there are any inherent biases in their approach. For this particular fund, the focus is mostly on equities that are traded in the United States.
Right now, 99.34% of this mutual fund’s holdings are stocks, which have an average market capitalization of $3.82 billion. The fund has the heaviest exposure to the following market sectors:
- Industrial Cyclical
Turnover is about 77%, so those in charge of the fund make more trades in a given year than the average of comparable funds.
For investors, taking a closer look at cost-related metrics is key, since costs are increasingly important for mutual fund investing. Competition is heating up in this space, and a lower cost product will likely outperform its otherwise identical counterpart, all things being equal. In terms of fees, USCAX is a no load fund. It has an expense ratio of 1.08% compared to the category average of 1.08%. From a cost perspective, USCAX is actually on par with its peers.
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.
Overall, USAA Small Cap Stock Fund ( USCAX ) has a high Zacks Mutual Fund rank, and in conjunction with its comparatively strong performance, worse downside risk, and on par fees, USAA Small Cap Stock Fund ( USCAX ) looks like a good potential choice for investors right now.
For additional information on the Mutual Fund Equity Report area of the mutual fund world, make sure to check out www.zacks.com/funds/mutual-funds. There, you can see more about the ranking process, and dive even deeper into USCAX too for additional information. If you want to check out our stock reports as well, make sure to go to Zacks.com to see all of the great tools we have to offer, including our time-tested Zacks Rank.