There are plenty of choices in the Global – Equity category, but where should you start your research? Well, one fund that might be worth investigating is American Funds New Economy A (ANEFX). ANEFX carries a Zacks Mutual Fund Rank of 1 (Strong Buy), which is based on nine forecasting factors like size, cost, and past performance.
ANEFX is classified in the Global – Equity segment by Zacks, an area full of possibilities. Even though Global – Equity mutual funds invest in bigger markets like the U.S., Europe, and Japan, these kinds of funds aren’t limited by geography. Rather, they offer an investment strategy that utilizes the global economy to provide stable returns.
History of Fund/Manager
American Funds is based in Los Angeles, CA, and is the manager of ANEFX. The American Funds New Economy A made its debut in December of 1983 and ANEFX has managed to accumulate roughly $13.11 billion in assets, as of the most recently available information. A team of investment professionals is the fund’s current manager.
Of course, investors look for strong performance in funds. This fund has delivered a 5-year annualized total return of 19.3%, and it sits in the top 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 14%, which places it in the top 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. Compared to the category average of 15.25%, the standard deviation of ANEFX over the past three years is 18.24%. Looking at the past 5 years, the fund’s standard deviation is 15.22% compared to the category average of 12.85%. 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 0.94, 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. ANEFX’s 5-year performance has produced a positive alpha of 3.65, which means managers in this portfolio are skilled in picking securities that generate better-than-benchmark returns.
As competition heats up in the mutual fund market, costs become increasingly important. Compared to its otherwise identical counterpart, a low-cost product will be an outperformer, all other things being equal. Thus, taking a closer look at cost-related metrics is vital for investors. In terms of fees, ANEFX is a load fund. It has an expense ratio of 0.78% compared to the category average of 1.14%. Looking at the fund from a cost perspective, ANEFX is actually cheaper than its peers.
While the minimum initial investment for the product is $250, investors should also note that each subsequent investment needs to be at least $50.
Overall, American Funds New Economy A ( ANEFX ) has a high Zacks Mutual Fund rank, and in conjunction with its comparatively strong performance, average downside risk, and lower fees, this fund looks like a good potential choice for investors right now.
Want even more information about ANEFX? Then go over to Zacks.com and check out our mutual fund comparison tool, and all of the other great features that we have to help you with your mutual fund analysis 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.