Is American Funds EuroPacific Growth A (AEPGX) a Strong Mutual Fund Pick Right Now?

Having trouble finding a Non US – Equity fund? American Funds EuroPacific Growth A (AEPGX) is a possible starting point. AEPGX carries a Zacks Mutual Fund Rank of 3 (Hold), which is based on various forecasting factors like size, cost, and past performance.

Zacks categorizes AEPGX as Non US – Equity, a segment stacked high with options. Non US – Equity mutual funds like to invest in companies outside of the United States, an important characteristic since global mutual funds are known to keep a good portion of their portfolio stateside. These kinds of funds can often extend across all cap levels, and will typically allocate their investments between emerging and developed markets.

American Funds is based in Los Angeles, CA, and is the manager of AEPGX. American Funds EuroPacific Growth A made its debut in April of 1984, and since then, AEPGX has accumulated about $20.94 billion in assets, per the most up-to-date date available. A team of investment professionals is the fund’s current manager.

Obviously, what investors are looking for in these funds is strong performance relative to their peers. AEPGX has a 5-year annualized total return of 6.72% and is in the middle third among its category peers. If you’re interested in shorter time frames, do not dismiss looking at the fund’s 3 -year annualized total return of 3.57%, 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. Compared to the category average of 14.43%, the standard deviation of AEPGX over the past three years is 17.2%. Over the past 5 years, the standard deviation of the fund is 18.51% compared to the category average of 15.59%. 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 0.93, so it is likely going to be 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. AEPGX’s 5-year performance has produced a negative alpha of -7.64, which means managers in this portfolio find it difficult to pick securities that generate better-than-benchmark returns.