Is American Funds Cap World Growth & Income R3 (RWICX) a Strong Mutual Fund Pick Right Now?

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Having trouble finding a Mutual Fund Equity Report fund? Well, American Funds Cap World Growth & Income R3 (RWICX) would not be a good potential starting point right now. RWICX bears a Zacks Mutual Fund Rank of 4 (Sell), which is based on nine forecasting factors like size, cost, and past performance.

American Funds is based in Los Angeles, CA, and is the manager of RWICX. American Funds Cap World Growth & Income R3 debuted in March of 1993. Since then, RWICX has accumulated assets of about $1.49 billion, according to 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 carries a 5-year annualized total return of 12.76%, and is 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 17.93%, 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. RWICX’s standard deviation over the past three years is 16.15% compared to the category average of 14.96%. Over the past 5 years, the standard deviation of the fund is 14.13% compared to the category average of 12.65%. 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 0.87, 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. With a negative alpha of -2.89, 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 1.07% compared to the category average of 1.13%. From a cost perspective, RWICX is actually cheaper than its peers.

While the minimum initial investment for the product is $250, investors should also note that each subsequent investment needs to be at least $50.

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 lower fees, this fund looks like a somewhat weak choice for investors right now.

This could just be the start of your research on RWICXin the Mutual Fund Equity Report category. Consider going to www.zacks.com/funds/mutual-funds for additional information about this fund, and all the others that we rank 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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