If you’ve been stuck searching for Non US – Equity funds, you might want to consider passing on by American Funds EuroPacific Growth R6 (RERGX) as a possibility. RERGX possesses a Zacks Mutual Fund Rank of 5 (Strong Sell), which is based on various forecasting factors like size, cost, and past performance.
Objective
We classify RERGX in the Non US – Equity category, which is an area rife with potential choices. Investing in companies outside the United States is how Non US – Equity funds set themselves apart, since global funds tend to keep a good portion of their portfolio stateside. Many of these funds like to allocate across emerging and developed markets, and will often focus on all cap levels.
History of Fund/Manager
RERGX is a part of the American Funds family of funds, a company based out of Los Angeles, CA. The American Funds EuroPacific Growth R6 made its debut in May of 2009 and RERGX has managed to accumulate roughly $68.16 billion in assets, as of the most recently available information. The fund is currently managed by a team of investment professionals.
Performance
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 6.48%, and is 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 -1.58%, which places it in the middle 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, RERGX’s standard deviation comes in at 17.89%, compared to the category average of 0%. The standard deviation of the fund over the past 5 years is 18.67% compared to the category average of 91%. This makes the fund less volatile than its peers over the past half-decade.
Risk Factors
Investors should note that the fund has a 5-year beta of 0.93, which means it is hypothetically less volatile than the market at large. 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. RERGX’s 5-year performance has produced a negative alpha of -6.44, which means 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, RERGX is a no load fund. It has an expense ratio of 0.46% compared to the category average of 46%. From a cost perspective, RERGX 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
Fees charged by investment advisors have not been taken into considiration. Returns would be less if those were included.
Bottom Line
Overall, even with its comparatively similar performance, better downside risk, and lower fees, American Funds EuroPacific Growth R6 ( RERGX ) has a low Zacks Mutual Fund rank, and therefore looks a somewhat weak choice for investors right now.
For additional information on this product, or to compare it to other mutual funds in the Non US – Equity, make sure to go to www.zacks.com/funds/mutual-funds for additional information. Want to learn even more? We have a full suite of tools on stocks that you can use to find the best choices for your portfolio too, no matter what kind of investor you are.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Get Your Free (RERGX): Fund Analysis Report