Any investors hoping to find a Global – Equity fund might consider looking past American Funds Cap World Growth & Income R3 (RWICX). RWICX has a Zacks Mutual Fund Rank of 5 (Strong Sell), which is based on various 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
RWICX is a part of the American Funds family of funds, a company based out of Los Angeles, CA. The American Funds Cap World Growth & Income R3 made its debut in March of 1993 and RWICX has managed to accumulate roughly $1.01 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 9.13%, and it sits in the middle third among its category peers. Investors who prefer analyzing shorter time frames should look at its 3-year annualized total return of 4.07%, 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 RWICX over the past three years is 16.72% compared to the category average of 14.49%. The fund’s standard deviation over the past 5 years is 16.97% compared to the category average of 15.36%. 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. RWICX 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. RWICX’s 5-year performance has produced a negative alpha of -4.04, 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 1.06% compared to the category average of 0.95%. From a cost perspective, RWICX is actually more expensive 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
Fees charged by investment advisors have not been taken into considiration. Returns would be less if those were included.
Bottom Line
Overall, American Funds Cap World Growth & Income R3 ( RWICX ) has a low Zacks Mutual Fund rank, and in conjunction with its comparatively similar performance, average downside risk, and higher fees, American Funds Cap World Growth & Income R3 ( RWICX ) looks like a somewhat weak choice for investors right now.
Your research on the Global – Equity segment doesn’t have to stop here. You can check out all the great mutual fund tools we have to offer by going to www.zacks.com/funds/mutual-funds to see the additional features we offer as well 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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