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Is American Funds EuroPacific Growth F (AEGFX) a Strong Mutual Fund Pick Right Now?

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If you've been stuck searching for Non US - Equity funds, you might want to consider passing on by American Funds EuroPacific Growth F (AEGFX - Free Report) as a possibility. AEGFX possesses a Zacks Mutual Fund Rank of 5 (Strong Sell), which is based on various forecasting factors like size, cost, and past performance.

Objective

We classify AEGFX in the Non US - Equity category, which is an area rife with potential choices. Investing in companies outside the United States is how Non US - Equity funds set themselves apart, since global funds tend to keep a good portion of their portfolio stateside. Many of these funds like to allocate across emerging and developed markets, and will often focus on all cap levels.

History of Fund/Manager

AEGFX finds itself in the American Funds family, based out of Los Angeles, CA. The American Funds EuroPacific Growth F made its debut in April of 1984 and AEGFX has managed to accumulate roughly $1.38 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. AEGFX has a 5-year annualized total return of 7.2% and it sits 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 -2.46%, 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. The standard deviation of AEGFX over the past three years is 17.88% compared to the category average of 14.56%. Looking at the past 5 years, the fund's standard deviation is 18.85% compared to the category average of 15.46%. 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 0.93, 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. With a negative alpha of -6.5, 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, AEGFX is a no load fund. It has an expense ratio of 0.86% compared to the category average of 0.95%. From a cost perspective, AEGFX is actually cheaper than its peers.

This fund requires a minimum initial investment of $250, and each subsequent investment should be at least $50.

Fees charged by investment advisors have not been taken into considiration. Returns would be less if those were included.

Bottom Line

Overall, American Funds EuroPacific Growth F ( AEGFX ) has a low Zacks Mutual Fund rank, and in conjunction with its comparatively similar performance, average downside risk, and lower fees, this fund looks like a somewhat weak choice for investors right now.

For additional information on the Non US - Equity 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 AEGFX 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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