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Is American Funds New World A (NEWFX) a Strong Mutual Fund Pick Right Now?
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If investors are looking at the Non US - Equity fund category, American Funds New World A (NEWFX - Free Report) could be a potential option. NEWFX possesses a Zacks Mutual Fund Rank of 1 (Strong Buy), which is based on nine forecasting factors like size, cost, and past performance.
Objective
Zacks categorizes NEWFX as Non US - Equity, a segment stacked high with options. Non US - Equity mutual funds like to invest in companies outside of the United States, an important characteristic since global mutual funds are known to keep a good portion of their portfolio stateside. These kinds of funds can often extend across all cap levels, and will typically allocate their investments between emerging and developed markets.
History of Fund/Manager
American Funds is based in Los Angeles, CA, and is the manager of NEWFX. The American Funds New World A made its debut in June of 1999 and NEWFX has managed to accumulate roughly $11.41 billion in assets, as of the most recently available information. The fund's current manager is a team of investment professionals.
Performance
Investors naturally seek funds with strong performance. NEWFX has a 5-year annualized total return of 3.05% and is 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 9.7%, 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 11%, compared to the category average of 9.06%. The fund's standard deviation over the past 5 years is 11.57% compared to the category average of 9.45%. This makes the fund more volatile than its peers over the past half-decade.
Risk Factors
It's always important to be aware of the downsides to any future investment, so one should not discount the risks that come with this segment. In the most recent bear market, NEWFX lost 53.05% and outperformed its peer group by 5.41%. This might suggest that the fund is a better choice than its peers during a bear market.
Investors should not forget about beta, an important way to measure a mutual fund's risk compared to the market as a whole. NEWFX has a 5-year beta of 0.77, which means it is likely to be less volatile than the market average. Another factor to consider is alpha, as it reflects a portfolio's performance on a risk-adjusted basis relative to a benchmark-in this case, the S&P 500. With a negative alpha of -4.11, managers in this portfolio find it difficult to pick securities that generate better-than-benchmark returns.
Expenses
For investors, taking a closer look at cost-related metrics is key, since costs are increasingly important for mutual fund investing. Competition is heating up in this space, and a lower cost product will likely outperform its otherwise identical counterpart, all things being equal. In terms of fees, NEWFX is a load fund. It has an expense ratio of 0.99% compared to the category average of 1.20%. From a cost perspective, NEWFX 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 World A ( NEWFX ) has a high Zacks Mutual Fund rank, strong performance, average downside risk, and lower fees compared to its peers.
For additional information on this product, or to compare it to other mutual funds in the Non US - Equity, make sure to go to www.zacks.com/funds/mutual-funds for additional information. For analysis of the rest of your portfolio, make sure to visit Zacks.com for our full suite of tools which will help you investigate all of your stocks and funds in one place.
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Is American Funds New World A (NEWFX) a Strong Mutual Fund Pick Right Now?
If investors are looking at the Non US - Equity fund category, American Funds New World A (NEWFX - Free Report) could be a potential option. NEWFX possesses a Zacks Mutual Fund Rank of 1 (Strong Buy), which is based on nine forecasting factors like size, cost, and past performance.
Objective
Zacks categorizes NEWFX as Non US - Equity, a segment stacked high with options. Non US - Equity mutual funds like to invest in companies outside of the United States, an important characteristic since global mutual funds are known to keep a good portion of their portfolio stateside. These kinds of funds can often extend across all cap levels, and will typically allocate their investments between emerging and developed markets.
History of Fund/Manager
American Funds is based in Los Angeles, CA, and is the manager of NEWFX. The American Funds New World A made its debut in June of 1999 and NEWFX has managed to accumulate roughly $11.41 billion in assets, as of the most recently available information. The fund's current manager is a team of investment professionals.
Performance
Investors naturally seek funds with strong performance. NEWFX has a 5-year annualized total return of 3.05% and is 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 9.7%, 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 11%, compared to the category average of 9.06%. The fund's standard deviation over the past 5 years is 11.57% compared to the category average of 9.45%. This makes the fund more volatile than its peers over the past half-decade.
Risk Factors
It's always important to be aware of the downsides to any future investment, so one should not discount the risks that come with this segment. In the most recent bear market, NEWFX lost 53.05% and outperformed its peer group by 5.41%. This might suggest that the fund is a better choice than its peers during a bear market.
Investors should not forget about beta, an important way to measure a mutual fund's risk compared to the market as a whole. NEWFX has a 5-year beta of 0.77, which means it is likely to be less volatile than the market average. Another factor to consider is alpha, as it reflects a portfolio's performance on a risk-adjusted basis relative to a benchmark-in this case, the S&P 500. With a negative alpha of -4.11, managers in this portfolio find it difficult to pick securities that generate better-than-benchmark returns.
Expenses
For investors, taking a closer look at cost-related metrics is key, since costs are increasingly important for mutual fund investing. Competition is heating up in this space, and a lower cost product will likely outperform its otherwise identical counterpart, all things being equal. In terms of fees, NEWFX is a load fund. It has an expense ratio of 0.99% compared to the category average of 1.20%. From a cost perspective, NEWFX 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 World A ( NEWFX ) has a high Zacks Mutual Fund rank, strong performance, average downside risk, and lower fees compared to its peers.
For additional information on this product, or to compare it to other mutual funds in the Non US - Equity, make sure to go to www.zacks.com/funds/mutual-funds for additional information. For analysis of the rest of your portfolio, make sure to visit Zacks.com for our full suite of tools which will help you investigate all of your stocks and funds in one place.