USAA is a highly regarded financial services company that has been in business for nearly 100 years and provides a wide range of insurance and investment products, including a large class of zero-value mutual funds. It should be noted that the investor must be a member of USAA.
Membership is limited to those who have served in the military or have served in the military and certain family members of this military personnel.
Below are the top three USAA mutual funds based on 10-year performance and five-star Morningstar ratings during the same 10-year period.
The minimum investment for all these funds is US$3,000. All funds apply to IRA and ordinary accounts.
The USSCX is a specialized fund investing in specific sectors or industries. Typically, the fund invests at least 80% of the fund’s assets in stocks of companies specializing in scientific or technological products or services. The fund can also invest up to 50% of its assets in foreign securities.
Because of these two factors, the fund’s risk profile is very aggressive. Investors should expect a high degree of volatility, but returns may be much higher than average compared with the middle stock market. Investors in the fund must have a long-term investment horizon because they may suffer considerable losses in the short term. The fund’s 10-year annual return rate is 20.62%, and the benchmark is 13.88%.
According to Morningstar, this places USSCX in 19% of similar funds. The expense ratio is 1.04%, which is slightly lower than the average cost ratio of its peers. Alphabet, Inc. is one of the three common stocks of USSCX. Class A, Apple, and Microsoft USAWX is a moderately aggressive growth fund with a global perspective.
The fund invests in foreign and domestic stocks and may invest in emerging market companies. This means that the fund’s risk includes the economic risks of the countries it invests in, which can increase volatility. However, the fund typically invests in large-cap stocks, which tend to be less volatile than small-cap stocks. As an actively managed fund, the investor must also consider management risk.
The fund’s 10-year annual return is 10.91% versus the benchmark of 13.88%. According to Morningstar, USAWX ranks in the top 6% of all funds in its category. The expense ratio is 1.07%, slightly above the average cost ratio of comparable companies. The three most significant common shares in USAWX are Walt Disney Co., Time Warner, Inc., and Nestle SA.