Largest non-U.S. equity mutual fund outperforms passive indexes

The American Funds EuroPacific Growth Fund Class R-6, with defined contribution assets of $78.8 billion as of June 30, was the largest among non-U.S. equity mutual funds, according to data collected by Pensions & Investments. This was more than four times the next largest, the American Funds New Perspective Fund Class R-6, which had DC assets of $19.2 billion

The American Funds EuroPacific Growth Fund, with $141.4 billion of total assets as of Jan. 31, has seen its year-to-date return rebound to 8.4%. That bested the fund’s benchmark, the MSCI ACWI ex-U.S. index, which returned 7.6%. It was also better than the MSCI EAFE index’s 7.9% return.

Although the fund lagged the two passive indexes’ return over the last year, it did beat both over the last five and 10 years.

The fund’s Sharpe ratio over the last five years was 0.14, compared with the MSCI EAFE and MSCI ACWI ex-U.S. indexes 0.13 and 0.09, respectively. The higher Sharpe ratio comes about despite the 19% volatility compared with 17.7% and 17.4% for the two indexes.