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Is Victory Science & Technology (USSCX) a Strong Mutual Fund Pick Right Now?

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Any investors hoping to find a Sector - Tech fund could think about starting with Victory Science & Technology (USSCX - Free Report) . USSCX possesses a Zacks Mutual Fund Rank of 1 (Strong Buy), which is based on various forecasting factors like size, cost, and past performance.

Objective

The world of Sector - Tech funds is an area filled with options, and USSCX is one of them. Sector - Tech mutual funds allow investors to own a stake in a notoriously volatile sector with a much more diversified approach. Tech companies can be in any number of industries such as semiconductors, software, internet, networking just to name a few.

History of Fund/Manager

Victory is based in Columbus, OH, and is the manager of USSCX. Victory Science & Technology made its debut in August of 1997, and since then, USSCX has accumulated about $1.28 billion in assets, per the most up-to-date date available. A team of investment professionals is the fund's current manager.

Performance

Of course, investors look for strong performance in funds. This fund has delivered a 5-year annualized total return of 5.99%, and it sits in the bottom third among its category peers. Investors who prefer analyzing shorter time frames should look at its 3-year annualized total return of 20.4%, which places it in the bottom 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 USSCX over the past three years is 20.84% compared to the category average of 19.02%. The fund's standard deviation over the past 5 years is 22.79% compared to the category average of 18.81%. 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 1.22, so it is likely going to be 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. USSCX has generated a negative alpha over the past five years of -8.87, demonstrating that managers in this portfolio find it difficult to pick securities that generate better-than-benchmark returns.

Holdings

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 principally on equities that are traded in the United States.

Currently, this mutual fund is holding 77.26% in stocks, which have an average market capitalization of $475.92 billion. The fund has the heaviest exposure to the following market sectors:

  • Technology
  • Health

With turnover at about 62%, this fund is making more trades per year than the comparable average.

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, USSCX is a no load fund. It has an expense ratio of 0.96% compared to the category average of 1.10%. From a cost perspective, USSCX is actually cheaper than 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.

Fees charged by investment advisors have not been taken into consideration. Returns would be less if those were included.

Bottom Line

Overall, even with its comparatively weak performance, average downside risk, and lower fees, Victory Science & Technology ( USSCX ) has a high Zacks Mutual Fund rank, and therefore looks a great potential choice for investors right now.

This could just be the start of your research on USSCX in the Sector - Tech 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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