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Is American Funds New World A (NEWFX) a Strong Mutual Fund Pick Right Now?
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Any investors hoping to find a Mutual Fund Equity Report fund could think about starting with American Funds New World A (NEWFX - Free Report) . NEWFX carries a Zacks Mutual Fund Rank of 2 (Buy), which is based on nine forecasting factors like size, cost, and past performance.
History of Fund/Manager
American Funds is responsible for NEWFX, and the company is based out of Los Angeles, CA. The American Funds New World A made its debut in June of 1999 and NEWFX has managed to accumulate roughly $16.84 billion in assets, as of the most recently available information. A team of investment professionals is the fund's current manager.
Performance
Obviously, what investors are looking for in these funds is strong performance relative to their peers. NEWFX has a 5-year annualized total return of 13.8% and is in the top third among its category peers. But if you are looking for a shorter time frame, it is also worth looking at its 3-year annualized total return of 16.29%, 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, NEWFX's standard deviation comes in at 17.85%, compared to the category average of 15.05%. The fund's standard deviation over the past 5 years is 15.18% compared to the category average of 12.77%. 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 0.85, so it is likely going to be less volatile than 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. NEWFX's 5-year performance has produced a negative alpha of -1.05, which means managers in this portfolio find it difficult to pick securities that generate better-than-benchmark returns.
Expenses
Costs are increasingly important for mutual fund investing, and particularly as competition heats up in this market. And all things being equal, a lower cost product will outperform its otherwise identical counterpart, so taking a closer look at these metrics is key for investors. In terms of fees, NEWFX is a load fund. It has an expense ratio of 0.95% compared to the category average of 1.18%. Looking at the fund from a cost perspective, NEWFX is actually cheaper than its peers.
Investors should also note that the minimum initial investment for the product is $250 and that each subsequent investment needs to be at $50.
Bottom Line
Overall, American Funds New World A ( NEWFX ) has a high Zacks Mutual Fund rank, and in conjunction with its comparatively strong performance, average downside risk, and lower fees, American Funds New World A ( NEWFX ) 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 Mutual Fund Equity Report, make sure to go to www.zacks.com/funds/mutual-funds 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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Is American Funds New World A (NEWFX) a Strong Mutual Fund Pick Right Now?
Any investors hoping to find a Mutual Fund Equity Report fund could think about starting with American Funds New World A (NEWFX - Free Report) . NEWFX carries a Zacks Mutual Fund Rank of 2 (Buy), which is based on nine forecasting factors like size, cost, and past performance.
History of Fund/Manager
American Funds is responsible for NEWFX, and the company is based out of Los Angeles, CA. The American Funds New World A made its debut in June of 1999 and NEWFX has managed to accumulate roughly $16.84 billion in assets, as of the most recently available information. A team of investment professionals is the fund's current manager.
Performance
Obviously, what investors are looking for in these funds is strong performance relative to their peers. NEWFX has a 5-year annualized total return of 13.8% and is in the top third among its category peers. But if you are looking for a shorter time frame, it is also worth looking at its 3-year annualized total return of 16.29%, 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, NEWFX's standard deviation comes in at 17.85%, compared to the category average of 15.05%. The fund's standard deviation over the past 5 years is 15.18% compared to the category average of 12.77%. 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 0.85, so it is likely going to be less volatile than 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. NEWFX's 5-year performance has produced a negative alpha of -1.05, which means managers in this portfolio find it difficult to pick securities that generate better-than-benchmark returns.
Expenses
Costs are increasingly important for mutual fund investing, and particularly as competition heats up in this market. And all things being equal, a lower cost product will outperform its otherwise identical counterpart, so taking a closer look at these metrics is key for investors. In terms of fees, NEWFX is a load fund. It has an expense ratio of 0.95% compared to the category average of 1.18%. Looking at the fund from a cost perspective, NEWFX is actually cheaper than its peers.
Investors should also note that the minimum initial investment for the product is $250 and that each subsequent investment needs to be at $50.
Bottom Line
Overall, American Funds New World A ( NEWFX ) has a high Zacks Mutual Fund rank, and in conjunction with its comparatively strong performance, average downside risk, and lower fees, American Funds New World A ( NEWFX ) 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 Mutual Fund Equity Report, make sure to go to www.zacks.com/funds/mutual-funds 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.