Investors in search of an Index fund might want to consider looking at USAA NASDAQ-100 Index Fund (USNQX). 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 is a part of the Victory family of funds, a company based out of Columbus, OH. The USAA NASDAQ-100 Index Fund made its debut in October of 2000 and USNQX has managed to accumulate roughly $3.71 billion in assets, as of the most recently available information. The fund's current manager, Mannik Dhillon, has been in charge of the fund since July of 2019.
Of course, investors look for strong performance in funds. USNQX has a 5-year annualized total return of 25.51% 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 25.93%, 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. Over the past three years, USNQX's standard deviation comes in at 20.16%, compared to the category average of 15.86%. Over the past 5 years, the standard deviation of the fund is 16.95% compared to the category average of 13.19%. This makes the fund more volatile than its peers over the past half-decade.
The fund has a 5-year beta of 1.03, so investors should note that it is hypothetically as volatile as 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 7.05, demonstrating that managers in this portfolio are skilled in picking securities that generate better-than-benchmark returns.
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 0.44% compared to the category average of 0.79%. From a cost perspective, USNQX is actually cheaper than its peers.
Investors should also note that the minimum initial investment for the product is $3,000 and that each subsequent investment needs to be at $50.
For additional information on the Index 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 USNQX too 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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