On the lookout for a Global - Equity fund? Starting with American Funds Cap World Growth & Income R3 (
RWICX Quick Quote RWICX - Free Report) should not be a possibility at this time. RWICX carries a Zacks Mutual Fund Rank of 4 (Sell), which is based on nine forecasting factors like size, cost, and past performance. Objective
We note that RWICX is a Global - Equity option, an investment area loaded with different options. While Global - Equity mutual funds invest their assets in large markets--think the U.S., Europe, and Japan--they aren't limited by geography. Their investment technique is one that leverages the global economy in order to offer stable returns.
History of Fund/Manager
American Funds is based in Los Angeles, CA, and is the manager of RWICX. American Funds Cap World Growth & Income R3 made its debut in March of 1993, and since then, RWICX has accumulated about $1.44 billion in assets, per the most up-to-date date available. The fund's current manager is a team of investment professionals.
Of course, investors look for strong performance in funds. This fund carries a 5-year annualized total return of 12.97%, and is in the middle 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 12.17%, which places it in the middle 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. Compared to the category average of 15.2%, the standard deviation of RWICX over the past three years is 16.86%. The fund's standard deviation over the past 5 years is 13.75% compared to the category average of 12.6%. This makes the fund more volatile than its peers over the past half-decade.
Investors should note that the fund has a 5-year beta of 0.86, so it is likely going to be less volatile than the market at large. 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 -2.05, managers in this portfolio find it difficult to pick securities that generate better-than-benchmark returns.
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, RWICX is a no load fund. It has an expense ratio of 1.07% compared to the category average of 1.13%. RWICX is actually cheaper than its peers when you consider factors like cost.
While the minimum initial investment for the product is $250, investors should also note that each subsequent investment needs to be at least $50.
Overall, American Funds Cap World Growth & Income R3 ( RWICX ) has a low Zacks Mutual Fund rank, and in conjunction with its comparatively similar performance, average downside risk, and lower fees, this fund looks like a somewhat weak choice for investors right now.
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