USAA Capital Growth (USCGX)
At the time of this writing, there are only four 5-star rated mutual funds that USAA offers. Three of the four are bond funds. The other 5-star rated mutual fund in the USAA Capital Growth (USCGX) mutual fund. The mutual fund has consistently beat the S&P 500. The expense ratio is only 1% which is pretty good. That's the most you should pay for a mutual fund. It has been around for 10-years; however, it has been rated a 5-star fund since inception. It's very risky, with 91% invested in stocks. I don't think that's a big problem; especially if you are younger and can afford such risk. Any mutual fund with that much exposure to stocks will beat the market during the good times and lose a lot more than the market during bad times.
Based on my opinion, it looks like that most of the growth comes from international stocks. The top five holdings are all international stocks. I like the fund; however, I would wait for a market downturn to put your chips into the fund. It's a shame that USAA only has one, non-bond 5-star rated fund. Let me know how the fund has done for you.
Based on my opinion, it looks like that most of the growth comes from international stocks. The top five holdings are all international stocks. I like the fund; however, I would wait for a market downturn to put your chips into the fund. It's a shame that USAA only has one, non-bond 5-star rated fund. Let me know how the fund has done for you.
Labels: mutual funds, usaa
posted by Money for Military at 10:32 PM
4 Comments:
I am a long time USAA member, over 40 years. USAA has always offered superior service through all three of their service sectors, Banking, Insurance and Investment Services. I am very happy with them.
My wife and I both have IRA's with USAA. I totally agree with you about USAA Capital Growth. The fund name is misleading since it does not indicate international exposure.
I rebalance my investments and enter new funds by dollar cost averaging with monthly transfers from my money market fund to other funds. Sometimes when a fund has done very well I will do profit taking by dumping part of my shares back into my money market fund.
I just noticed that 2 days ago, this funds' morningstar rating was changed from 5 to 4 stars. I wonder why?
Mike, do you know what the Morningstar rating means? Morningstar's star rating is for value. If a stock or mutual fund has five stars that means the stock is undervalued compared to its "intrinsic value." It doesn't mean anything negative if you lose a star with Morningstar. The only thing it means is that Morningstar believes that the mutual fund's price is getting closer to its intrinsic value.
We have been using this fund as our Roth IRA for two years, based on USAA's financial recommendation. Since the sharp down-turn in the market and the economy, we started to actually monitor what was going on with the fund instead of just throwing money at it (we are young and can take risk) however, this fund has a 1.41 management fee and a BETA tracking of 1.04. Why are we paying the money to manage a fund that is just following the market? We are now looking for a an index fund and a bond fun to diversify. USAA only offers one index fund and its mgmt fee is .37, much higher than Vanguard or other competitors. USAA has great banking and insurance but we are now looking for something more when it comes to investing...any thoughts?
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