On the lookout for a Mutual Fund Equity Report fund? Starting with American Funds Cap World Growth & Income A (CWGIX) should not be a possibility at this time. CWGIX has a Zacks Mutual Fund Rank of 5 (Strong Sell), which is based on various forecasting factors like size, cost, and past performance.
History of Fund/Manager
American Funds is based in Los Angeles, CA, and is the manager of CWGIX. American Funds Cap World Growth & Income A debuted in March of 1993. Since then, CWGIX has accumulated assets of about $49.99 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 has delivered a 5-year annualized total return of 5.41%, and is in the bottom third among its category peers. Investors who prefer analyzing shorter time frames should look at its 3-year annualized total return of 10.48%, 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. CWGIX’s standard deviation over the past three years is 17.3% compared to the category average of 15.51%. Over the past 5 years, the standard deviation of the fund is 17.28% compared to the category average of 15.34%. This makes the fund more volatile than its peers over the past half-decade.
Risk Factors
Investors should note that the fund has a 5-year beta of 0.88, which means it is hypothetically less volatile than the market at large. 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 -4.4, 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, CWGIX is a load fund. It has an expense ratio of 0.75% compared to the category average of 1.11%. From a cost perspective, CWGIX 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 Cap World Growth & Income A ( CWGIX ) has a low Zacks Mutual Fund rank, and in conjunction with its comparatively weak performance, average downside risk, and lower fees, American Funds Cap World Growth & Income A ( CWGIX ) looks like a somewhat weak choice for investors right now.
This could just be the start of your research on CWGIXin 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. Zacks provides a full suite of tools to help you analyze your portfolio – both funds and stocks – in the most efficient way possible.
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