If you have been looking for Non US – Equity funds, a place to start could be American Funds New World A (NEWFX). NEWFX carries a Zacks Mutual Fund Rank of 1 (Strong Buy), which is based on nine forecasting factors like size, cost, and past performance.
Zacks categorizes NEWFX 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 NEWFX. American Funds New World A made its debut in June of 1999, and since then, NEWFX has accumulated about $13.34 billion in assets, per the most up-to-date date available. The fund’s current manager is a team of investment professionals.
Of course, investors look for strong performance in funds. NEWFX has a 5-year annualized total return of 15.45% and is 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 14.69%, 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. NEWFX’s standard deviation over the past three years is 18.23% compared to the category average of 15.3%. Looking at the past 5 years, the fund’s standard deviation is 14.98% compared to the category average of 12.69%. This makes the fund more volatile than its peers over the past half-decade.
With a 5-year beta of 0.85, the fund is likely to be less volatile than the market average. 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. The fund has produced a positive alpha over the past 5 years of 0.92, which shows that managers in this portfolio are skilled in picking securities that generate better-than-benchmark returns.
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, NEWFX is a load fund. It has an expense ratio of 1% compared to the category average of 1.18%. From a cost perspective, NEWFX 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.
Overall, American Funds New World A ( NEWFX ) has a high Zacks Mutual Fund rank, and in conjunction with its comparatively strong performance, average downside risk, and lower fees, American Funds New World A ( NEWFX ) looks like a good potential 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 NEWFX too 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.