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Is American Funds Growth Portfolio A (GWPAX) a Strong Mutual Fund Pick Right Now?
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Any investors hoping to find an All Cap Growth fund could think about starting with American Funds Growth Portfolio A (GWPAX - Free Report) . GWPAX carries a Zacks Mutual Fund Rank of 3 (Hold), which is based on nine forecasting factors like size, cost, and past performance.
Objective
We note that GWPAX is an All Cap Growth option, and is loaded with different selections. All Cap Growth mutual funds look to invest in a wide variety of equities, no matter the size of the company and as long as the firm exhibits growth characteristics. In order to increase diversification, these portfolios have holdings across small, medium, and large-cap levels.
History of Fund/Manager
American Funds is responsible for GWPAX, and the company is based out of Los Angeles, CA. The American Funds Growth Portfolio A made its debut in May of 2012 and GWPAX has managed to accumulate roughly $3.36 billion in assets, as of the most recently available information. A team of investment professionals is the fund's current manager.
Performance
Investors naturally seek funds with strong performance. This fund has delivered a 5-year annualized total return of 11.64%, and it sits in the top 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 9.65%, which places it in the top 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. Looking at the past 5 years, the fund's standard deviation is 9.91% compared to the category average of 1.1%. This makes the fund more volatile than its peers over the past half-decade.
Risk Factors
One cannot ignore the volatility of this segment, however, as it is always important for investors to remember the downside to any potential investment.
Nevertheless, investors should also note that the fund has a 5-year beta of 0.94, which means it is hypothetically less 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. Over the past 5 years, the fund has a negative alpha of -0.48. This means that managers in this portfolio find it difficult to pick securities that generate better-than-benchmark returns.
Holdings
Investigating the equity holdings of a mutual fund is also a valuable exercise. This can show us how the manager is applying their stated methodology, as well as if there are any inherent biases in their approach. For this particular fund, the focus is primarily on equities that are traded in the United States.
This fund is currently holding about 82.02% stock in stocks and it has a negligible amount of assets in foreign securities. This fund's turnover is about 33%, so the fund managers are making fewer trades than comparable funds.
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, GWPAX is a load fund and it has an expense ratio of 0.33%.
While the minimum initial investment for the product is $250, investors should also note that each subsequent investment needs to be at least $50.
Bottom Line
With a rank of 'hold' we aren't getting a good signal one way or another on GWPAX. That is why it might be a good idea to consider other items, such as the fund's expense ratio of 0.33%, and how this compares to other potential options being considered for investment. If cheaper, it might make a decent choice, but a more expensive fund might be worth avoiding. Just make sure to pay attention to its rank in case it shifts in the near future.
For additional information on the All Cap Growth area of the mutual fund world, make sure to check out www.zacks.com/funds/mutual-funds. There, you can see more about the ranking process, and dive even deeper into GWPAX too 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 Growth Portfolio A (GWPAX) a Strong Mutual Fund Pick Right Now?
Any investors hoping to find an All Cap Growth fund could think about starting with American Funds Growth Portfolio A (GWPAX - Free Report) . GWPAX carries a Zacks Mutual Fund Rank of 3 (Hold), which is based on nine forecasting factors like size, cost, and past performance.
Objective
We note that GWPAX is an All Cap Growth option, and is loaded with different selections. All Cap Growth mutual funds look to invest in a wide variety of equities, no matter the size of the company and as long as the firm exhibits growth characteristics. In order to increase diversification, these portfolios have holdings across small, medium, and large-cap levels.
History of Fund/Manager
American Funds is responsible for GWPAX, and the company is based out of Los Angeles, CA. The American Funds Growth Portfolio A made its debut in May of 2012 and GWPAX has managed to accumulate roughly $3.36 billion in assets, as of the most recently available information. A team of investment professionals is the fund's current manager.
Performance
Investors naturally seek funds with strong performance. This fund has delivered a 5-year annualized total return of 11.64%, and it sits in the top 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 9.65%, which places it in the top 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. Looking at the past 5 years, the fund's standard deviation is 9.91% compared to the category average of 1.1%. This makes the fund more volatile than its peers over the past half-decade.
Risk Factors
One cannot ignore the volatility of this segment, however, as it is always important for investors to remember the downside to any potential investment.
Nevertheless, investors should also note that the fund has a 5-year beta of 0.94, which means it is hypothetically less 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. Over the past 5 years, the fund has a negative alpha of -0.48. This means that managers in this portfolio find it difficult to pick securities that generate better-than-benchmark returns.
Holdings
Investigating the equity holdings of a mutual fund is also a valuable exercise. This can show us how the manager is applying their stated methodology, as well as if there are any inherent biases in their approach. For this particular fund, the focus is primarily on equities that are traded in the United States.
This fund is currently holding about 82.02% stock in stocks and it has a negligible amount of assets in foreign securities. This fund's turnover is about 33%, so the fund managers are making fewer trades than comparable funds.
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, GWPAX is a load fund and it has an expense ratio of 0.33%.
While the minimum initial investment for the product is $250, investors should also note that each subsequent investment needs to be at least $50.
Bottom Line
With a rank of 'hold' we aren't getting a good signal one way or another on GWPAX. That is why it might be a good idea to consider other items, such as the fund's expense ratio of 0.33%, and how this compares to other potential options being considered for investment. If cheaper, it might make a decent choice, but a more expensive fund might be worth avoiding. Just make sure to pay attention to its rank in case it shifts in the near future.
For additional information on the All Cap Growth area of the mutual fund world, make sure to check out www.zacks.com/funds/mutual-funds. There, you can see more about the ranking process, and dive even deeper into GWPAX too 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.