If you've been stuck searching for All Cap Value funds, consider Victory Sycamore Established Value A (VETAX) as a possibility. VETAX bears a Zacks Mutual Fund Rank of 2 (Buy), which is based on nine forecasting factors like size, cost, and past performance.
Objective
We classify VETAX in the All Cap Value category, an area rife with potential choices. Like the name suggests, MUTUAL FUNDS invest in small, medium, and large-cap companies, though they end up focusing on bigger firms due to percentage of assets. These funds look for key value characteristics, targeting stocks that boast low P/E ratios, high dividend yields, and whose share prices do not reflect their worth.
History of Fund/Manager
Victory is based in Cleveland, OH, and is the manager of VETAX. The Victory Sycamore Established Value A made its debut in May of 2000 and VETAX has managed to accumulate roughly $1.76 billion in assets, as of the most recently available information. A team of investment professionals is the fund's current manager.
Performance
Investors naturally seek funds with strong performance. This fund has delivered a 5-year annualized total return of 7.14%, 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 7.81%, 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. VETAX's standard deviation over the past three years is 11.7% compared to the category average of 9.92%. Looking at the past 5 years, the fund's standard deviation is 11.58% compared to the category average of 9.76%. This makes the fund more volatile than its peers over the past half-decade.
Risk Factors
Investors should always remember the downsides to a potential investment, and this segment carries some risks one should be aware of. VETAX lost 42.47% in the most recent bear market and outperformed its peer group by 8.98%. This makes the fund a possibly better choice than its peers during a sliding market environment.
Even still, the fund has a 5-year beta of 0.97, so investors should note that it is hypothetically as volatile as the market at large. Alpha is an additional metric to take into consideration, since it represents a portfolio's performance on a risk-adjusted basis relative to a benchmark, which in this case, is the S&P 500. VETAX's 5-year performance has produced a negative alpha of -0.93, which means managers in this portfolio find it difficult to pick 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 largely on equities that are traded in the United States.
The mutual fund currently has 95.57% of its holdings in stocks, with an average market capitalization of $16.07 billion. The fund has the heaviest exposure to the following market sectors:
- Finance
- Technology
- Industrial Cyclical
With turnover at about 36%, this fund is making fewer trades than comparable funds.
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, VETAX is a load fund. It has an expense ratio of 0.90% compared to the category average of 1.15%. VETAX is actually cheaper than its peers when you consider factors like cost.
Investors should also note that the minimum initial investment for the product is $2,500 and that each subsequent investment needs to be at $50.
Bottom Line
Overall, Victory Sycamore Established Value A ( VETAX ) has a high Zacks Mutual Fund rank, and in conjunction with its comparatively strong performance, average downside risk, and lower fees, Victory Sycamore Established Value A ( VETAX ) looks like a good potential choice for investors right now.
For additional information on this product, or to compare it to other mutual funds in the All Cap Value, make sure to go to www.zacks.com/funds/mutual-funds 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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Zacks Investment Research