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Is American Funds SMALLCAP World A (SMCWX) 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 SMALLCAP World A (SMCWX - Free Report) should not be a possibility at this time. SMCWX possesses a Zacks Mutual Fund Rank of 4 (Sell), 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 SMCWX. The American Funds SMALLCAP World A made its debut in April of 1990 and SMCWX has managed to accumulate roughly $31.47 billion in assets, as of the most recently available information. A team of investment professionals is the fund's current manager.
Performance
Investors naturally seek funds with strong performance. SMCWX has a 5-year annualized total return of 4.84% and is in the top third among its category peers. Investors who prefer analyzing shorter time frames should look at its 3-year annualized total return of 4.01%, 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 17.15%, the standard deviation of SMCWX over the past three years is 23.96%. The fund's standard deviation over the past 5 years is 20.54% compared to the category average of 15%. 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 1.02, which means it is hypothetically as volatile as 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. Over the past 5 years, the fund has a negative alpha of -4.82. This means 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, SMCWX is a load fund. It has an expense ratio of 0.99% compared to the category average of 1.10%. So, SMCWX is actually cheaper than its peers from a cost perspective.
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 SMALLCAP World A ( SMCWX ) has a low Zacks Mutual Fund rank, and in conjunction with its comparatively strong performance, worse downside risk, and lower fees, American Funds SMALLCAP World A ( SMCWX ) looks like a somewhat weak choice for investors right now.
This could just be the start of your research on SMCWXin the Mutual Fund Equity Report 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. 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 SMALLCAP World A (SMCWX) a Strong Mutual Fund Pick Right Now?
On the lookout for a Mutual Fund Equity Report fund? Starting with American Funds SMALLCAP World A (SMCWX - Free Report) should not be a possibility at this time. SMCWX possesses a Zacks Mutual Fund Rank of 4 (Sell), 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 SMCWX. The American Funds SMALLCAP World A made its debut in April of 1990 and SMCWX has managed to accumulate roughly $31.47 billion in assets, as of the most recently available information. A team of investment professionals is the fund's current manager.
Performance
Investors naturally seek funds with strong performance. SMCWX has a 5-year annualized total return of 4.84% and is in the top third among its category peers. Investors who prefer analyzing shorter time frames should look at its 3-year annualized total return of 4.01%, 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 17.15%, the standard deviation of SMCWX over the past three years is 23.96%. The fund's standard deviation over the past 5 years is 20.54% compared to the category average of 15%. 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 1.02, which means it is hypothetically as volatile as 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. Over the past 5 years, the fund has a negative alpha of -4.82. This means 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, SMCWX is a load fund. It has an expense ratio of 0.99% compared to the category average of 1.10%. So, SMCWX is actually cheaper than its peers from a cost perspective.
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 SMALLCAP World A ( SMCWX ) has a low Zacks Mutual Fund rank, and in conjunction with its comparatively strong performance, worse downside risk, and lower fees, American Funds SMALLCAP World A ( SMCWX ) looks like a somewhat weak choice for investors right now.
This could just be the start of your research on SMCWXin the Mutual Fund Equity Report 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. Zacks provides a full suite of tools to help you analyze your portfolio - both funds and stocks - in the most efficient way possible.