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Is American Funds Growth Fund of America C (GFACX) a Strong Mutual Fund Pick Right Now?
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If you've been stuck searching for Large Cap Growth funds, consider American Funds Growth Fund of America C (GFACX - Free Report) as a possibility. GFACX has a Zacks Mutual Fund Rank of 1 (Strong Buy), which is based on various forecasting factors like size, cost, and past performance.
Objective
GFACX is part of the Large Cap Growth section, and this segment boasts an array of other possible options. Large Cap Growth mutual funds purchase stakes in numerous large U.S. companies that are expected to develop and grow at a faster rate than other large-cap stocks. Companies are usually considered to be large-cap if their market capitalization is over $10 billion.
History of Fund/Manager
American Funds is based in Los Angeles, CA, and is the manager of GFACX. American Funds Growth Fund of America C debuted in March of 2001. Since then, GFACX has accumulated assets of about $3.89 billion, according to the most recently available information. The fund's current manager is a team of investment professionals.
Performance
Obviously, what investors are looking for in these funds is strong performance relative to their peers. This fund in particular has delivered a 5-year annualized total return of 10.65%, 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 22.48%, 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 11.17%, the standard deviation of GFACX over the past three years is 15.33%. Over the past 5 years, the standard deviation of the fund is 18.19% compared to the category average of 13.07%. 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 1.13, which means it is hypothetically more volatile than 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. The fund has produced a negative alpha over the past 5 years of -3.21, which shows 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, GFACX is a no load fund. It has an expense ratio of 1.35% compared to the category average of 0.93%. Looking at the fund from a cost perspective, GFACX is actually more expensive 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 consideration. Returns would be less if those were included.
Bottom Line
Overall, even with its comparatively similar performance, worse downside risk, and higher fees, American Funds Growth Fund of America C ( GFACX ) has a high Zacks Mutual Fund rank, and therefore looks a good potential choice for investors right now.
Don't stop here for your research on Large Cap Growth funds. We also have plenty more on our site in order to help you find the best possible fund for your portfolio. Make sure to check out www.zacks.com/funds/mutual-funds for more information about the world of funds, and feel free to compare GFACX to its peers as well 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 Growth Fund of America C (GFACX) a Strong Mutual Fund Pick Right Now?
If you've been stuck searching for Large Cap Growth funds, consider American Funds Growth Fund of America C (GFACX - Free Report) as a possibility. GFACX has a Zacks Mutual Fund Rank of 1 (Strong Buy), which is based on various forecasting factors like size, cost, and past performance.
Objective
GFACX is part of the Large Cap Growth section, and this segment boasts an array of other possible options. Large Cap Growth mutual funds purchase stakes in numerous large U.S. companies that are expected to develop and grow at a faster rate than other large-cap stocks. Companies are usually considered to be large-cap if their market capitalization is over $10 billion.
History of Fund/Manager
American Funds is based in Los Angeles, CA, and is the manager of GFACX. American Funds Growth Fund of America C debuted in March of 2001. Since then, GFACX has accumulated assets of about $3.89 billion, according to the most recently available information. The fund's current manager is a team of investment professionals.
Performance
Obviously, what investors are looking for in these funds is strong performance relative to their peers. This fund in particular has delivered a 5-year annualized total return of 10.65%, 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 22.48%, 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 11.17%, the standard deviation of GFACX over the past three years is 15.33%. Over the past 5 years, the standard deviation of the fund is 18.19% compared to the category average of 13.07%. 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 1.13, which means it is hypothetically more volatile than 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. The fund has produced a negative alpha over the past 5 years of -3.21, which shows 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, GFACX is a no load fund. It has an expense ratio of 1.35% compared to the category average of 0.93%. Looking at the fund from a cost perspective, GFACX is actually more expensive 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 consideration. Returns would be less if those were included.
Bottom Line
Overall, even with its comparatively similar performance, worse downside risk, and higher fees, American Funds Growth Fund of America C ( GFACX ) has a high Zacks Mutual Fund rank, and therefore looks a good potential choice for investors right now.
Don't stop here for your research on Large Cap Growth funds. We also have plenty more on our site in order to help you find the best possible fund for your portfolio. Make sure to check out www.zacks.com/funds/mutual-funds for more information about the world of funds, and feel free to compare GFACX to its peers as well 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.