Is American Funds EuroPacific Growth R6 (RERGX) a Strong Mutual Fund Pick Right Now?
Mutual Fund Report for RERGX
There are plenty of choices in the Non US - Equity category, but where should you start your research? Well, one fund that you should consider investigating is American Funds EuroPacific Growth R6 (RERGX). RERGX has a Zacks Mutual Fund Rank of 3 (Hold), which is based on nine forecasting factors like size, cost, and past performance.
RERGX 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
RERGX finds itself in the American Funds family, based out of Los Angeles, CA. American Funds EuroPacific Growth R6 debuted in May of 2009. Since then, RERGX has accumulated assets of about $91.48 billion, according to the most recently available information. The fund's current manager is a team of investment professionals.
Obviously, what investors are looking for in these funds is strong performance relative to their peers. This fund has delivered a 5-year annualized total return of 12.92%, and it sits in the middle 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 12.42%, 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. RERGX's standard deviation over the past three years is 18.81% compared to the category average of 15.16%. The fund's standard deviation over the past 5 years is 15.44% compared to the category average of 12.53%. This makes the fund more volatile than its peers over the past half-decade.
Investors should note that the fund has a 5-year beta of 0.88, so it is likely going to be less volatile than the market at large. Alpha is an additional metric to take into consideration, since it represents a portfolio's performance on a risk-adjusted basis relative to a benchmark, which in this case, is the S&P 500. RERGX's 5-year performance has produced a negative alpha of -1.98, which means managers in this portfolio find it difficult to pick securities that generate better-than-benchmark returns.
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, RERGX is a no load fund. It has an expense ratio of 0.46% compared to the category average of 1.18%. Looking at the fund from a cost perspective, RERGX is actually cheaper than its peers.
Investors need to be aware that with this product, the minimum initial investment is $250; each subsequent investment needs to be at least $50.
Overall, American Funds EuroPacific Growth R6 ( RERGX ) 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 R6 ( RERGX ) looks like a somewhat average choice for investors right now.
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