Non US – Equity fund seekers should consider taking a look at American Funds EuroPacific Growth A (AEPGX). AEPGX bears a Zacks Mutual Fund Rank of 1 (Strong Buy), which is based on various forecasting factors like size, cost, and past performance.
Objective
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
American Funds is based in Los Angeles, CA, and is the manager of AEPGX. The American Funds EuroPacific Growth A made its debut in April of 1984 and AEPGX has managed to accumulate roughly $20.15 billion in assets, as of the most recently available information. The fund is currently managed by a team of investment professionals.
Performance
Obviously, what investors are looking for in these funds is strong performance relative to their peers. AEPGX has a 5-year annualized total return of 5.24%, 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 17.01%, which places it in the top 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. Over the past three years, AEPGX’s standard deviation comes in at 13.12%, compared to the category average of 11.31%. The fund’s standard deviation over the past 5 years is 16.17% compared to the category average of 13.18%. This makes the fund more volatile than its peers over the past half-decade.
Risk Factors
Investors should not forget about beta, an important way to measure a mutual fund’s risk compared to the market as a whole. AEPGX has a 5-year beta of 0.9, which means it is likely to be less volatile than the market average. 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 -5.79, demonstrating that managers in this portfolio find it difficult to pick securities that generate better-than-benchmark returns.