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Is VALIC Company I Emerging Economies (VCGEX) a Strong Mutual Fund Pick Right Now?
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If investors are looking at the Global - Equity fund category, VALIC Company I Emerging Economies (VCGEX - Free Report) could be a potential option. VCGEX bears a Zacks Mutual Fund Rank of 1 (Strong Buy), which is based on nine forecasting factors like size, cost, and past performance.
Objective
VCGEX is classified in the Global - Equity segment by Zacks, an area full of possibilities. Even though Global - Equity mutual funds invest in bigger markets like the U.S., Europe, and Japan, these kinds of funds aren't limited by geography. Rather, they offer an investment strategy that utilizes the global economy to provide stable returns.
History of Fund/Manager
VCGEX finds itself in the VALIC Funds family, based out of Houston, TX. VALIC Company I Emerging Economies made its debut in September of 2006, and since then, VCGEX has accumulated about $708.87 million in assets, per the most up-to-date date available. The fund is currently managed by George Iwanicki who has been in charge of the fund since October of 2011.
Performance
Of course, investors look for strong performance in funds. This fund has delivered a 5-year annualized total return of 5.27%, and is in the bottom third among its category peers. If you're interested in shorter time frames, do not dismiss looking at the fund's 3-year annualized total return of 12.59%, 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. Over the past three years, VCGEX's standard deviation comes in at 16.02%, compared to the category average of 11.12%. The fund's standard deviation over the past 5 years is 14.96% compared to the category average of 10.62%. This makes the fund more volatile than its peers over the past half-decade.
Risk Factors
It's always important to be aware of the downsides to any future investment, so one should not discount the risks that come with this segment. In the most recent bear market, VCGEX lost 67.42% and underperformed its peer group by 15.01%. This could mean that the fund is a worse choice than comparable funds during a bear market.
Investors should note that the fund has a 5-year beta of 0.93, so it is likely going to be less 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. The fund has produced a negative alpha over the past 5 years of -7.74, which shows that managers in this portfolio find it difficult to pick securities that generate better-than-benchmark returns.
Expenses
As competition heats up in the mutual fund market, costs become increasingly important. Compared to its otherwise identical counterpart, a low-cost product will be an outperformer, all other things being equal. Thus, taking a closer look at cost-related metrics is vital for investors. In terms of fees, VCGEX is a no load fund. It has an expense ratio of 0.94% compared to the category average of 1.07%. From a cost perspective, VCGEX is actually cheaper than its peers.
Investors should also note that the minimum initial investment for the product is $0 and that each subsequent investment has no minimum amount.
Bottom Line
Overall, VALIC Company I Emerging Economies has a high Zacks Mutual Fund rank, and in conjunction with its comparatively weak performance, average downside risk, and lower fees, this fund looks like a great potential choice for investors right now.
For additional information on this product, or to compare it to other mutual funds in the Global - Equity, 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 VALIC Company I Emerging Economies (VCGEX) a Strong Mutual Fund Pick Right Now?
If investors are looking at the Global - Equity fund category, VALIC Company I Emerging Economies (VCGEX - Free Report) could be a potential option. VCGEX bears a Zacks Mutual Fund Rank of 1 (Strong Buy), which is based on nine forecasting factors like size, cost, and past performance.
Objective
VCGEX is classified in the Global - Equity segment by Zacks, an area full of possibilities. Even though Global - Equity mutual funds invest in bigger markets like the U.S., Europe, and Japan, these kinds of funds aren't limited by geography. Rather, they offer an investment strategy that utilizes the global economy to provide stable returns.
History of Fund/Manager
VCGEX finds itself in the VALIC Funds family, based out of Houston, TX. VALIC Company I Emerging Economies made its debut in September of 2006, and since then, VCGEX has accumulated about $708.87 million in assets, per the most up-to-date date available. The fund is currently managed by George Iwanicki who has been in charge of the fund since October of 2011.
Performance
Of course, investors look for strong performance in funds. This fund has delivered a 5-year annualized total return of 5.27%, and is in the bottom third among its category peers. If you're interested in shorter time frames, do not dismiss looking at the fund's 3-year annualized total return of 12.59%, 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. Over the past three years, VCGEX's standard deviation comes in at 16.02%, compared to the category average of 11.12%. The fund's standard deviation over the past 5 years is 14.96% compared to the category average of 10.62%. This makes the fund more volatile than its peers over the past half-decade.
Risk Factors
It's always important to be aware of the downsides to any future investment, so one should not discount the risks that come with this segment. In the most recent bear market, VCGEX lost 67.42% and underperformed its peer group by 15.01%. This could mean that the fund is a worse choice than comparable funds during a bear market.
Investors should note that the fund has a 5-year beta of 0.93, so it is likely going to be less 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. The fund has produced a negative alpha over the past 5 years of -7.74, which shows that managers in this portfolio find it difficult to pick securities that generate better-than-benchmark returns.
Expenses
As competition heats up in the mutual fund market, costs become increasingly important. Compared to its otherwise identical counterpart, a low-cost product will be an outperformer, all other things being equal. Thus, taking a closer look at cost-related metrics is vital for investors. In terms of fees, VCGEX is a no load fund. It has an expense ratio of 0.94% compared to the category average of 1.07%. From a cost perspective, VCGEX is actually cheaper than its peers.
Investors should also note that the minimum initial investment for the product is $0 and that each subsequent investment has no minimum amount.
Bottom Line
Overall, VALIC Company I Emerging Economies has a high Zacks Mutual Fund rank, and in conjunction with its comparatively weak performance, average downside risk, and lower fees, this fund looks like a great potential choice for investors right now.
For additional information on this product, or to compare it to other mutual funds in the Global - Equity, 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.