There are plenty of choices in the Large Cap Growth category, but where should you start your research? Well, one fund that might be worth investigating is USAA Aggressive Growth Fund (USAUX). USAUX holds a Zacks Mutual Fund Rank of 2 (Buy), which is based on various forecasting factors like size, cost, and past performance.
USAUX is part of the Large Cap Growth section, and this segment boasts an array of other possible options. Large Cap Growth mutual funds purchase stakes in numerous large U.S. companies that are expected to develop and grow at a faster rate than other large-cap stocks. Companies are usually considered to be large-cap if their market capitalization is over $10 billion.
Victory is based in Columbus, OH, and is the manager of USAUX. Since USAA Aggressive Growth Fund made its debut in October of 1981, USAUX has garnered more than $2.47 billion in assets. The fund is currently managed by a team of investment professionals.
Investors naturally seek funds with strong performance. USAUX has a 5-year annualized total return of 16.19% and it sits in the middle third among its category peers. But if you are looking for a shorter time frame, it is also worth looking at its 3-year annualized total return of 14.24%, which places it in the top third during this time-frame.
It is important to note that the product’s returns may not reflect all its expenses. Any fees not reflected would lower the returns. Total returns do not reflect the fund’s [%] sale charge. If sales charges were included, total returns would have been lower.
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 USAUX over the past three years is 20.75% compared to the category average of 17.83%. Looking at the past 5 years, the fund’s standard deviation is 21.7% compared to the category average of 18.36%. 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 1.1, which means it is hypothetically more volatile than the market at large. Because alpha represents a portfolio’s performance on a risk-adjusted basis relative to a benchmark, which is the S&P 500 in this case, one should pay attention to this metric as well. USAUX has generated a positive alpha over the past five years of 0.26, demonstrating that managers in this portfolio are skilled in picking securities that generate better-than-benchmark returns.
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, USAUX is a no load fund. It has an expense ratio of 0.64% compared to the category average of 0.94%. So, USAUX is actually cheaper than its peers from a cost perspective.
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.
Fees charged by investment advisors have not been taken into considiration. Returns would be less if those were included.
Overall, USAA Aggressive Growth Fund ( USAUX ) has a high Zacks Mutual Fund rank, and in conjunction with its comparatively similar performance, average downside risk, and lower fees, USAA Aggressive Growth Fund ( USAUX ) looks like a good potential choice for investors right now.
Your research on the Large Cap Growth segment doesn’t have to stop here. You can check out all the great mutual fund tools we have to offer by going to www.zacks.com/funds/mutual-funds to see the additional features we offer as well 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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This article originally published on Zacks Investment Research (zacks.com).