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

Mutual Fund Report for USNQX

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This story originally appeared on Zacks

Looking for a Mutual Fund Equity Report fund? You may want to consider USAA NASDAQ-100 Index Fund (USNQX) as a possible option. USNQX has no Zacks Mutual Fund Rank, but we have been able to look into other metrics like performance, volatility, and cost.

- Zacks

History of Fund/Manager

Victory is based in Columbus, OH, and is the manager of USNQX. Since USAA NASDAQ-100 Index Fund made its debut in October of 2000, USNQX has garnered more than $4.39 billion in assets. The fund's current manager, Mannik Dhillon, has been in charge of the fund since July of 2019.

Performance

Obviously, what investors are looking for in these funds is strong performance relative to their peers. This fund in particular has delivered a 5-year annualized total return of 28.05%, and is in the top 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 33.08%, 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 19.86% compared to the category average of 17.78%. Looking at the past 5 years, the fund's standard deviation is 17.29% compared to the category average of 14.62%. This makes the fund more volatile than its peers over the past half-decade.

Risk Factors

Investors should note that the fund has a 5-year beta of 1.04, 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. USNQX has generated a positive alpha over the past five years of 8.38, demonstrating that managers in this portfolio are skilled in picking securities that generate better-than-benchmark returns.

Holdings

Exploring 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 primarily on equities that are traded in the United States.

This fund is currently holding about 80.34% stock in stocks, and these companies have an average market capitalization of $568.23 billion. The fund has the heaviest exposure to the following market sectors:

  1. Technology
  2. Retail Trade

This fund's turnover is about 2%, so the fund managers are making fewer trades than the average comparable fund.

Expenses

As competition heats up in the mutual fund market, costs become increasingly important. Compared to its otherwise identical counterpart, a low-cost product will be an outperformer, all other things being equal. Thus, taking a closer look at cost-related metrics is vital for investors. In terms of fees, USNQX is a no load fund. It has an expense ratio of 0.43% compared to the category average of 0.78%. So, USNQX 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.

Bottom Line

This could just be the start of your research on USNQXin the Mutual Fund Equity Report category. Consider going to www.zacks.com/funds/mutual-funds for additional information about this fund, and all the others that we rank as well for additional information. If you are more of a stock investor, make sure to also check out our Zacks Rank, and our full suite of tools we have available for novice and professional investors alike.



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