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Is American Funds SMALLCAP World A (SMCWX) a Strong Mutual Fund Pick Right Now?
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Global - Equity fund seekers may want to consider taking a look at American Funds SMALLCAP World A (SMCWX - Free Report) . SMCWX bears a Zacks Mutual Fund Rank of 3 (Hold), which is based on various forecasting factors like size, cost, and past performance.
Objective
Zacks categorizes SMCWX as Global - Equity, which is a segment packed with options. Global - Equity mutual funds invest in large markets like the U.S., Europe, and Japan, and operate with very few geographical limitations. They also provide an investment technique that leverages the diverse nature of the global economy in the hopes of providing a stable return.
History of Fund/Manager
American Funds is based in Los Angeles, CA, and is the manager of SMCWX. American Funds SMALLCAP World A debuted in April of 1990. Since then, SMCWX has accumulated assets of about $28.07 billion, according to the most recently available information. A team of investment professionals is the fund's current manager.
Performance
Obviously, what investors are looking for in these funds is strong performance relative to their peers. SMCWX has a 5-year annualized total return of 1.46%, and it sits 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 12.53%, 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. Over the past three years, SMCWX's standard deviation comes in at 15.98%, compared to the category average of 11.21%. Looking at the past 5 years, the fund's standard deviation is 17.61% compared to the category average of 13.06%. This makes the fund more volatile than its peers over the past half-decade.
Risk Factors
Investors should not forget about beta, an important way to measure a mutual fund's risk compared to the market as a whole. SMCWX has a 5-year beta of 1.02, which means it is likely to be as volatile as the market average. 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. SMCWX has generated a negative alpha over the past five years of -10.26, demonstrating that 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 1.03% compared to the category average of 0.95%. Looking at the fund from a cost perspective, SMCWX is actually more expensive than its peers.
Investors need to be aware that with this product, the minimum initial investment is $250; each subsequent investment needs to be at least $50.
Fees charged by investment advisors have not been taken into consideration. Returns would be less if those were included.
Bottom Line
Overall, even with its comparatively similar performance, average downside risk, and higher fees, American Funds SMALLCAP World A ( SMCWX ) has a neutral Zacks Mutual Fund rank, and therefore looks a somewhat average choice for investors right now.
Want even more information about SMCWX? Then go over to Zacks.com and check out our mutual fund comparison tool, and all of the other great features that we have to help you with your mutual fund analysis for additional information. Want to learn even more? We have a full suite of tools on stocks that you can use to find the best choices for your portfolio too, no matter what kind of investor you are.
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Is American Funds SMALLCAP World A (SMCWX) a Strong Mutual Fund Pick Right Now?
Global - Equity fund seekers may want to consider taking a look at American Funds SMALLCAP World A (SMCWX - Free Report) . SMCWX bears a Zacks Mutual Fund Rank of 3 (Hold), which is based on various forecasting factors like size, cost, and past performance.
Objective
Zacks categorizes SMCWX as Global - Equity, which is a segment packed with options. Global - Equity mutual funds invest in large markets like the U.S., Europe, and Japan, and operate with very few geographical limitations. They also provide an investment technique that leverages the diverse nature of the global economy in the hopes of providing a stable return.
History of Fund/Manager
American Funds is based in Los Angeles, CA, and is the manager of SMCWX. American Funds SMALLCAP World A debuted in April of 1990. Since then, SMCWX has accumulated assets of about $28.07 billion, according to the most recently available information. A team of investment professionals is the fund's current manager.
Performance
Obviously, what investors are looking for in these funds is strong performance relative to their peers. SMCWX has a 5-year annualized total return of 1.46%, and it sits 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 12.53%, 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. Over the past three years, SMCWX's standard deviation comes in at 15.98%, compared to the category average of 11.21%. Looking at the past 5 years, the fund's standard deviation is 17.61% compared to the category average of 13.06%. This makes the fund more volatile than its peers over the past half-decade.
Risk Factors
Investors should not forget about beta, an important way to measure a mutual fund's risk compared to the market as a whole. SMCWX has a 5-year beta of 1.02, which means it is likely to be as volatile as the market average. 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. SMCWX has generated a negative alpha over the past five years of -10.26, demonstrating that 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 1.03% compared to the category average of 0.95%. Looking at the fund from a cost perspective, SMCWX is actually more expensive than its peers.
Investors need to be aware that with this product, the minimum initial investment is $250; each subsequent investment needs to be at least $50.
Fees charged by investment advisors have not been taken into consideration. Returns would be less if those were included.
Bottom Line
Overall, even with its comparatively similar performance, average downside risk, and higher fees, American Funds SMALLCAP World A ( SMCWX ) has a neutral Zacks Mutual Fund rank, and therefore looks a somewhat average choice for investors right now.
Want even more information about SMCWX? Then go over to Zacks.com and check out our mutual fund comparison tool, and all of the other great features that we have to help you with your mutual fund analysis for additional information. Want to learn even more? We have a full suite of tools on stocks that you can use to find the best choices for your portfolio too, no matter what kind of investor you are.