Is American Funds EuroPacific Growth A (AEPGX) a Strong Mutual Fund Pick Right Now?

view original post

Have you been searching for a Non US – Equity fund? You might want to begin with American Funds EuroPacific Growth A (AEPGX). AEPGX possesses a Zacks Mutual Fund Rank of 3 (Hold), which is based on nine forecasting factors like size, cost, and past performance.

Load Error

Objective

AEPGX is classified in the Non US – Equity area by Zacks, and this segment is full of potential. Non US – Equity funds focus their investments on companies outside of the United States, which is an important distinction since global mutual funds tend to keep a sizable portion of their portfolio based in the United States. Most of these funds will allocate across emerging and developed markets, and can often extend across cap levels too.

History of Fund/Manager

American Funds is based in Los Angeles, CA, and is the manager of AEPGX. Since American Funds EuroPacific Growth A made its debut in April of 1984, AEPGX has garnered more than $27.95 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 in particular has delivered a 5-year annualized total return of 12.99%, 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 14.18%, 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. AEPGX’s standard deviation over the past three years is 18.75% compared to the category average of 15.16%. The standard deviation of the fund over the past 5 years is 15.48% compared to the category average of 12.53%. This makes the fund more volatile than its peers over the past half-decade.

Risk Factors

With a 5-year beta of 0.89, the fund 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. Over the past 5 years, the fund has a negative alpha of -2.48. This means that 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, AEPGX is a load fund. It has an expense ratio of 0.83% compared to the category average of 1.18%. From a cost perspective, AEPGX 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 EuroPacific Growth A ( AEPGX ) has a neutral Zacks Mutual Fund rank, and in conjunction with its comparatively similar performance, average downside risk, and lower fees, American Funds EuroPacific Growth A ( AEPGX ) looks like a somewhat average choice for investors right now.

Your research on the Non US – 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.

Continue Reading

Related Posts