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Is American Funds Growth Fund of America R6 (RGAGX) a Strong Mutual Fund Pick Right Now?
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Any investors hoping to find a Mutual Fund Equity Report fund could think about starting with American Funds Growth Fund of America R6 (RGAGX - Free Report) . RGAGX carries a Zacks Mutual Fund Rank of 1 (Strong Buy), which is based on various forecasting factors like size, cost, and past performance.
History of Fund/Manager
American Funds is responsible for RGAGX, and the company is based out of Los Angeles, CA. American Funds Growth Fund of America R6 debuted in May of 2009. Since then, RGAGX has accumulated assets of about $35.92 billion, according to the most recently available information. A team of investment professionals is the fund's current manager.
Performance
Of course, investors look for strong performance in funds. This fund in particular has delivered a 5-year annualized total return of 8.61%, and is in the bottom third among its category peers. Investors who prefer analyzing shorter time frames should look at its 3-year annualized total return of 5.15%, which places it in the middle third during this time-frame.
It is important to note that the product's returns may not reflect all its expenses. Any fees not reflected would lower the returns. Total returns do not reflect the fund's [%] sale charge. If sales charges were included, total returns would have been lower.
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 14.69%, the standard deviation of RGAGX over the past three years is 20.09%. The standard deviation of the fund over the past 5 years is 20.63% compared to the category average of 15.64%. This makes the fund more volatile than its peers over the past half-decade.
Risk Factors
The fund has a 5-year beta of 1.04, so investors should note that it is hypothetically more volatile than the market at large. Alpha is an additional metric to take into consideration, since it represents a portfolio's performance on a risk-adjusted basis relative to a benchmark, which in this case, is the S&P 500. With a negative alpha of -1.26, 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, RGAGX is a no load fund. It has an expense ratio of 0.30% compared to the category average of 0.98%. From a cost perspective, RGAGX is actually cheaper than its peers.
Investors should also note that the minimum initial investment for the product is $250 and that each subsequent investment needs to be at $50
Fees charged by investment advisors have not been taken into considiration. Returns would be less if those were included.
Bottom Line
Overall, even with its comparatively weak performance, average downside risk, and lower fees, American Funds Growth Fund of America R6 ( RGAGX ) has a high Zacks Mutual Fund rank, and therefore looks a great potential choice for investors right now.
For additional information on this product, or to compare it to other mutual funds in the Mutual Fund Equity Report, make sure to go to www.zacks.com/funds/mutual-funds 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 Growth Fund of America R6 (RGAGX) a Strong Mutual Fund Pick Right Now?
Any investors hoping to find a Mutual Fund Equity Report fund could think about starting with American Funds Growth Fund of America R6 (RGAGX - Free Report) . RGAGX carries a Zacks Mutual Fund Rank of 1 (Strong Buy), which is based on various forecasting factors like size, cost, and past performance.
History of Fund/Manager
American Funds is responsible for RGAGX, and the company is based out of Los Angeles, CA. American Funds Growth Fund of America R6 debuted in May of 2009. Since then, RGAGX has accumulated assets of about $35.92 billion, according to the most recently available information. A team of investment professionals is the fund's current manager.
Performance
Of course, investors look for strong performance in funds. This fund in particular has delivered a 5-year annualized total return of 8.61%, and is in the bottom third among its category peers. Investors who prefer analyzing shorter time frames should look at its 3-year annualized total return of 5.15%, which places it in the middle third during this time-frame.
It is important to note that the product's returns may not reflect all its expenses. Any fees not reflected would lower the returns. Total returns do not reflect the fund's [%] sale charge. If sales charges were included, total returns would have been lower.
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 14.69%, the standard deviation of RGAGX over the past three years is 20.09%. The standard deviation of the fund over the past 5 years is 20.63% compared to the category average of 15.64%. This makes the fund more volatile than its peers over the past half-decade.
Risk Factors
The fund has a 5-year beta of 1.04, so investors should note that it is hypothetically more volatile than the market at large. Alpha is an additional metric to take into consideration, since it represents a portfolio's performance on a risk-adjusted basis relative to a benchmark, which in this case, is the S&P 500. With a negative alpha of -1.26, 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, RGAGX is a no load fund. It has an expense ratio of 0.30% compared to the category average of 0.98%. From a cost perspective, RGAGX is actually cheaper than its peers.
Investors should also note that the minimum initial investment for the product is $250 and that each subsequent investment needs to be at $50
Fees charged by investment advisors have not been taken into considiration. Returns would be less if those were included.
Bottom Line
Overall, even with its comparatively weak performance, average downside risk, and lower fees, American Funds Growth Fund of America R6 ( RGAGX ) has a high Zacks Mutual Fund rank, and therefore looks a great potential choice for investors right now.
For additional information on this product, or to compare it to other mutual funds in the Mutual Fund Equity Report, make sure to go to www.zacks.com/funds/mutual-funds 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.