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Is American Funds Cap World Growth & Income R3 (RWICX) a Strong Mutual Fund Pick Right Now?

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Any investors hoping to find a Global - Equity fund could think about starting with American Funds Cap World Growth & Income R3 (RWICX - Free Report) . RWICX possesses a Zacks Mutual Fund Rank of 3 (Hold), which is based on nine forecasting factors like size, cost, and past performance.

Objective

RWICX 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

American Funds is based in Los Angeles, CA, and is the manager of RWICX. Since American Funds Cap World Growth & Income R3 made its debut in March of 1993, RWICX has garnered more than $1.69 billion in assets. 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 carries a 5-year annualized total return of 5.18%, and is in the middle 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 10.25%, 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. The standard deviation of RWICX over the past three years is 10.85% compared to the category average of 9.39%. The standard deviation of the fund over the past 5 years is 11.17% compared to the category average of 9.58%. 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. RWICX lost 51% in the most recent bear market and outperformed its peer group by 1.64%. This might suggest that the fund is a better choice than its peers during a bear market.

Investors should note that the fund has a 5-year beta of 0.85, so it is likely going to be 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. RWICX's 5-year performance has produced a negative alpha of -3.69, which means 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, RWICX is a no load fund. It has an expense ratio of 1.09% compared to the category average of 1.12%. Looking at the fund from a cost perspective, RWICX is actually cheaper 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.

Bottom Line

Overall, American Funds Cap World Growth & Income R3 ( RWICX ) has a neutral Zacks Mutual Fund rank, similar performance, average downside risk, and lower fees compared to its peers.

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. If you want to check out our stock reports as well, make sure to go to Zacks.com to see all of the great tools we have to offer, including our time-tested Zacks Rank.


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