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Is American Funds SMALLCAP World A (SMCWX) a Strong Mutual Fund Pick Right Now?
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There are plenty of choices in the Global - Equity category, but where should you start your research? Well, one fund that may not be worth investigating is American Funds SMALLCAP World A (SMCWX - Free Report) . SMCWX holds a Zacks Mutual Fund Rank of 5 (Strong Sell), which is based on various forecasting factors like size, cost, and past performance.
Objective
We note that SMCWX 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 SMCWX. The American Funds SMALLCAP World A made its debut in April of 1990 and SMCWX has managed to accumulate roughly $28.64 billion in assets, as of the most recently available information. The fund's current manager is a team of investment professionals.
Performance
Of course, investors look for strong performance in funds. This fund in particular has delivered a 5-year annualized total return of 6.85%, and it sits in the bottom 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 2.12%, 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. The standard deviation of SMCWX over the past three years is 18.14% compared to the category average of 14.15%. The fund's standard deviation over the past 5 years is 19.05% compared to the category average of 13.87%. This makes the fund more volatile than its peers over the past half-decade.
Risk Factors
With a 5-year beta of 1.03, the fund is likely to be as volatile as 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 -7.55, 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, SMCWX is a load fund. It has an expense ratio of 1.04% compared to the category average of 0.96%. Looking at the fund from a cost perspective, SMCWX is actually more expensive than its peers.
While the minimum initial investment for the product is $250, investors should also note that each subsequent investment needs to be at least $50.
Fees charged by investment advisors have not been taken into considiration. Returns would be less if those were included.
Bottom Line
Overall, American Funds SMALLCAP World A ( SMCWX ) has a low Zacks Mutual Fund rank, and in conjunction with its comparatively weak performance, worse downside risk, and higher 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 Global - Equity 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. And don't forget, Zacks has all of your needs covered on the equity side too! Make sure to check out Zacks.com for more information on our screening capabilities, Rank, and all our articles as well.
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Is American Funds SMALLCAP World A (SMCWX) a Strong Mutual Fund Pick Right Now?
There are plenty of choices in the Global - Equity category, but where should you start your research? Well, one fund that may not be worth investigating is American Funds SMALLCAP World A (SMCWX - Free Report) . SMCWX holds a Zacks Mutual Fund Rank of 5 (Strong Sell), which is based on various forecasting factors like size, cost, and past performance.
Objective
We note that SMCWX 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 SMCWX. The American Funds SMALLCAP World A made its debut in April of 1990 and SMCWX has managed to accumulate roughly $28.64 billion in assets, as of the most recently available information. The fund's current manager is a team of investment professionals.
Performance
Of course, investors look for strong performance in funds. This fund in particular has delivered a 5-year annualized total return of 6.85%, and it sits in the bottom 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 2.12%, 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. The standard deviation of SMCWX over the past three years is 18.14% compared to the category average of 14.15%. The fund's standard deviation over the past 5 years is 19.05% compared to the category average of 13.87%. This makes the fund more volatile than its peers over the past half-decade.
Risk Factors
With a 5-year beta of 1.03, the fund is likely to be as volatile as 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 -7.55, 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, SMCWX is a load fund. It has an expense ratio of 1.04% compared to the category average of 0.96%. Looking at the fund from a cost perspective, SMCWX is actually more expensive than its peers.
While the minimum initial investment for the product is $250, investors should also note that each subsequent investment needs to be at least $50.
Fees charged by investment advisors have not been taken into considiration. Returns would be less if those were included.
Bottom Line
Overall, American Funds SMALLCAP World A ( SMCWX ) has a low Zacks Mutual Fund rank, and in conjunction with its comparatively weak performance, worse downside risk, and higher 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 Global - Equity 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. And don't forget, Zacks has all of your needs covered on the equity side too! Make sure to check out Zacks.com for more information on our screening capabilities, Rank, and all our articles as well.