If investors are looking at the Non US - Equity fund category, American Funds EuroPacific Growth A (AEPGX - Free Report) could be a potential option. AEPGX has a Zacks Mutual Fund Rank of 1 (Strong Buy), which is based on nine forecasting factors like size, cost, and past performance.
Zacks categorizes AEPGX as Non US - Equity, a segment stacked high with options. Non US - Equity mutual funds like to invest in companies outside of the United States, an important characteristic since global mutual funds are known to keep a good portion of their portfolio stateside. These kinds of funds can often extend across all cap levels, and will typically allocate their investments between emerging and developed markets.
History of Fund/Manager
AEPGX finds itself in the American Funds family, based out of Los Angeles, CA. American Funds EuroPacific Growth A made its debut in April of 1984, and since then, AEPGX has accumulated about $29.07 billion in assets, per the most up-to-date date available. A team of investment professionals is the fund's current manager.
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 7.38%, and it sits in the top 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 8.46%, 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. Over the past three years, AEPGX's standard deviation comes in at 10.74%, compared to the category average of 8.95%. The standard deviation of the fund over the past 5 years is 10.73% compared to the category average of 8.73%. This makes the fund more volatile than its peers over the past half-decade.
Investors cannot discount the risks to this segment though, as it is always important to remember the downside for any potential investment. In AEPGX's case, the fund lost 51.29% in the most recent bear market and underperformed comparable funds by 7.11%. This might suggest that the fund is a worse choice than its peers during a bear market.
Nevertheless, investors should also note that the fund has a 5-year beta of 0.85, which means it is hypothetically less volatile than the market at large. 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. AEPGX has generated a negative alpha over the past five years of -4.26, demonstrating that managers in this portfolio find it difficult to pick securities that generate better-than-benchmark returns.
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, AEPGX is a load fund. It has an expense ratio of 0.82% compared to the category average of 1.28%. Looking at the fund from a cost perspective, AEPGX is actually cheaper 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.
Overall, American Funds EuroPacific Growth A ( AEPGX ) has a high Zacks Mutual Fund rank, and in conjunction with its comparatively strong performance, average downside risk, and lower fees, this fund looks like a good potential choice for investors right now.
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