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Is American Funds New Economy F2 (NEFFX) a Strong Mutual Fund Pick Right Now?
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If you've been stuck searching for Global - Equity funds, consider American Funds New Economy F2 (NEFFX - Free Report) as a possibility. NEFFX possesses a Zacks Mutual Fund Rank of 2 (Buy), which is based on nine forecasting factors like size, cost, and past performance.
Objective
NEFFX is classified in the Global - Equity segment by Zacks, an area full of possibilities. Even though Global - Equity mutual funds invest in bigger markets like the U.S., Europe, and Japan, these kinds of funds aren't limited by geography. Rather, they offer an investment strategy that utilizes the global economy to provide stable returns.
History of Fund/Manager
American Funds is based in Los Angeles, CA, and is the manager of NEFFX. Since American Funds New Economy F2 made its debut in August of 2008, NEFFX has garnered more than $1.41 billion in assets. The fund is currently managed by a team of investment professionals.
Performance
Investors naturally seek funds with strong performance. This fund has delivered a 5-year annualized total return of 9.12%, and it sits 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 14.14%, 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. The standard deviation of NEFFX over the past three years is 13.06% compared to the category average of 9%. The fund's standard deviation over the past 5 years is 12.91% compared to the category average of 9.37%. 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.
Nevertheless, with a 5-year beta of 0.98, the fund is likely to be as volatile as the market average. Because alpha represents a portfolio's performance on a risk-adjusted basis relative to a benchmark, which is the S&P 500 in this case, one should pay attention to this metric as well. NEFFX has generated a negative alpha over the past five years of -0.18, demonstrating that 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, NEFFX is a no load fund. It has an expense ratio of 0.55% compared to the category average of 1.13%. From a cost perspective, NEFFX is actually cheaper than its peers.
Investors need to be aware that with this product, the minimum initial investment is $250; each subsequent investment needs to be at least $50.
Bottom Line
Overall, American Funds New Economy F2 ( NEFFX ) has a high Zacks Mutual Fund rank, strong performance, average downside risk, and lower fees compared to its peers.
Don't stop here for your research on Global - Equity funds. We also have plenty more on our site in order to help you find the best possible fund for your portfolio. Make sure to check out www.zacks.com/funds/mutual-funds for more information about the world of funds, and feel free to compare NEFFX to its peers as well for additional information. Zacks provides a full suite of tools to help you analyze your portfolio - both funds and stocks - in the most efficient way possible.
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Is American Funds New Economy F2 (NEFFX) a Strong Mutual Fund Pick Right Now?
If you've been stuck searching for Global - Equity funds, consider American Funds New Economy F2 (NEFFX - Free Report) as a possibility. NEFFX possesses a Zacks Mutual Fund Rank of 2 (Buy), which is based on nine forecasting factors like size, cost, and past performance.
Objective
NEFFX is classified in the Global - Equity segment by Zacks, an area full of possibilities. Even though Global - Equity mutual funds invest in bigger markets like the U.S., Europe, and Japan, these kinds of funds aren't limited by geography. Rather, they offer an investment strategy that utilizes the global economy to provide stable returns.
History of Fund/Manager
American Funds is based in Los Angeles, CA, and is the manager of NEFFX. Since American Funds New Economy F2 made its debut in August of 2008, NEFFX has garnered more than $1.41 billion in assets. The fund is currently managed by a team of investment professionals.
Performance
Investors naturally seek funds with strong performance. This fund has delivered a 5-year annualized total return of 9.12%, and it sits 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 14.14%, 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. The standard deviation of NEFFX over the past three years is 13.06% compared to the category average of 9%. The fund's standard deviation over the past 5 years is 12.91% compared to the category average of 9.37%. 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.
Nevertheless, with a 5-year beta of 0.98, the fund is likely to be as volatile as the market average. Because alpha represents a portfolio's performance on a risk-adjusted basis relative to a benchmark, which is the S&P 500 in this case, one should pay attention to this metric as well. NEFFX has generated a negative alpha over the past five years of -0.18, demonstrating that 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, NEFFX is a no load fund. It has an expense ratio of 0.55% compared to the category average of 1.13%. From a cost perspective, NEFFX is actually cheaper than its peers.
Investors need to be aware that with this product, the minimum initial investment is $250; each subsequent investment needs to be at least $50.
Bottom Line
Overall, American Funds New Economy F2 ( NEFFX ) has a high Zacks Mutual Fund rank, strong performance, average downside risk, and lower fees compared to its peers.
Don't stop here for your research on Global - Equity funds. We also have plenty more on our site in order to help you find the best possible fund for your portfolio. Make sure to check out www.zacks.com/funds/mutual-funds for more information about the world of funds, and feel free to compare NEFFX to its peers as well for additional information. Zacks provides a full suite of tools to help you analyze your portfolio - both funds and stocks - in the most efficient way possible.