If investors are looking at the Global – Equity fund category, American Funds Cap World Growth & Income R3 (RWICX) could be a potential option. RWICX possesses a Zacks Mutual Fund Rank of 1 (Strong Buy), which is based on various forecasting factors like size, cost, and past performance.
We note that RWICX is a Global – Equity option, an investment area loaded with different options. While Global – Equity mutual funds invest their assets in large markets-think the U.S., Europe, and Japan-they aren’t limited by geography. Their investment technique is one that leverages the global economy in order to offer stable returns.
RWICX finds itself in the American Funds family, based out of Los Angeles, CA. American Funds Cap World Growth & Income R3 debuted in March of 1993. Since then, RWICX has accumulated assets of about $1.09 billion, according to the most recently available information. The fund is currently managed by a team of investment professionals.
Of course, investors look for strong performance in funds. RWICX has a 5-year annualized total return of 10.68%, 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 20.46%, 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, RWICX’s standard deviation comes in at 10.36%, compared to the category average of 10.63%. The standard deviation of the fund over the past 5 years is 14.01% compared to the category average of 12.66%. This makes the fund more volatile than its peers over the past half-decade.
With a 5-year beta of 0.86, 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. RWICX’s 5-year performance has produced a negative alpha of -1.78, which means managers in this portfolio find it difficult to pick securities that generate better-than-benchmark returns.
Costs are increasingly important for mutual fund investing, and particularly as competition heats up in this market. And all things being equal, a lower cost product will outperform its otherwise identical counterpart, so taking a closer look at these metrics is key for investors. In terms of fees, RWICX is a no load fund. It has an expense ratio of 1.05% compared to the category average of 0.94%. Looking at the fund 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 consideration. Returns would be less if those were included.
Overall, even with its comparatively similar performance, average downside risk, and higher fees, American Funds Cap World Growth & Income R3 ( RWICX ) has a high Zacks Mutual Fund rank, and therefore looks a good potential choice for investors right now.
For additional information on this product, or to compare it to other mutual funds in the Global – Equity, make sure to go to www.zacks.com/funds/mutual-funds for additional information. For analysis of the rest of your portfolio, make sure to visit Zacks.com for our full suite of tools which will help you investigate all of your stocks and funds in one place.
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This article originally published on Zacks Investment Research (zacks.com).