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Is American Funds New World A (NEWFX) a Strong Mutual Fund Pick Right Now?
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On the lookout for a Mutual Fund Equity Report fund? Starting with American Funds New World A (NEWFX - Free Report) is one possibility. NEWFX bears 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 based in Los Angeles, CA, and is the manager of NEWFX. Since American Funds New World A made its debut in June of 1999, NEWFX has garnered more than $17.04 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 6.49%, 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 7.46%, 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. Compared to the category average of 15.2%, the standard deviation of NEWFX over the past three years is 18.48%. The standard deviation of the fund over the past 5 years is 16.1% compared to the category average of 13.59%. 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 0.86, which means it is hypothetically less volatile than the market at large. 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. NEWFX has generated a negative alpha over the past five years of -4.49, 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, NEWFX is a load fund. It has an expense ratio of 0.96% compared to the category average of 1.15%. Looking at the fund from a cost perspective, NEWFX is actually cheaper than its peers.
This fund requires a minimum initial investment of $250, and each subsequent investment should be at least $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, this fund looks like a good potential choice for investors right now.
Your research on the Mutual Fund Equity Report segment doesn't have to stop here. You can check out all the great mutual fund tools we have to offer by going to www.zacks.com/funds/mutual-funds to see the additional features we offer as well 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?
On the lookout for a Mutual Fund Equity Report fund? Starting with American Funds New World A (NEWFX - Free Report) is one possibility. NEWFX bears 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 based in Los Angeles, CA, and is the manager of NEWFX. Since American Funds New World A made its debut in June of 1999, NEWFX has garnered more than $17.04 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 6.49%, 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 7.46%, 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. Compared to the category average of 15.2%, the standard deviation of NEWFX over the past three years is 18.48%. The standard deviation of the fund over the past 5 years is 16.1% compared to the category average of 13.59%. 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 0.86, which means it is hypothetically less volatile than the market at large. 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. NEWFX has generated a negative alpha over the past five years of -4.49, 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, NEWFX is a load fund. It has an expense ratio of 0.96% compared to the category average of 1.15%. Looking at the fund from a cost perspective, NEWFX is actually cheaper than its peers.
This fund requires a minimum initial investment of $250, and each subsequent investment should be at least $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, this fund looks like a good potential choice for investors right now.
Your research on the Mutual Fund Equity Report segment doesn't have to stop here. You can check out all the great mutual fund tools we have to offer by going to www.zacks.com/funds/mutual-funds to see the additional features we offer as well 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.