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Is American Century Global Gold Investor (BGEIX) a Strong Mutual Fund Pick Right Now?

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Any investors hoping to find a Sector - Precious Metal fund could think about starting with American Century Global Gold Investor (BGEIX - Free Report) . BGEIX bears a Zacks Mutual Fund Rank of 1 (Strong Buy), which is based on nine forecasting factors like size, cost, and past performance.

Objective

BGEIX is classified in the Sector - Precious Metal segment by Zacks, an area full of potential. Sector - Precious Metal mutual funds normally invest in stocks focused on the mining and production of precious metals such as gold, silver, platinum, and palladium. Often times, stocks here trade as leveraged bets of the underlying commodity, so they are tied to the prices of the metal, and can be quite volatile, too.

History of Fund/Manager

American Century is based in Kansas City, MO, and is the manager of BGEIX. American Century Global Gold Investor debuted in August of 1988. Since then, BGEIX has accumulated assets of about $362.89 million, according to the most recently available information. The fund's current manager, Yulin Long, has been in charge of the fund since May of 2016.

Performance

Of course, investors look for strong performance in funds. This fund carries a 5-year annualized total return of -10.93%, and it sits in the middle 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 9.3%, 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, BGEIX's standard deviation comes in at 40.25%, compared to the category average of 14.78%. Looking at the past 5 years, the fund's standard deviation is 38.96% compared to the category average of 37.79%. This makes the fund more volatile than its peers over the past half-decade.

Risk Factors

Investors cannot discount the risks to this segment though, as it is always important to remember the downside for any potential investment. BGEIX lost 33.92% in the most recent bear market and outperformed its peer group by 2.14%. This means that the fund could possibly be a better choice than its peers during a down market environment.

Nevertheless, with a 5-year beta of -0.16, the fund is likely to be less volatile than the market average. 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. With a negative alpha of -2.11, 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, BGEIX is a no load fund. It has an expense ratio of 0.67% compared to the category average of 1.38%. BGEIX is actually cheaper than its peers when you consider factors like cost.

Investors need to be aware that with this product, the minimum initial investment is $2,500; each subsequent investment needs to be at least $50.

Bottom Line

Overall, American Century Global Gold Investor has a high Zacks Mutual Fund rank, and in conjunction with its comparatively similar performance, average downside risk, and lower fees, this fund looks like a good potential choice for investors right now.

This could just be the start of your research on BGEIXin the Sector - Precious Metal 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. 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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