Is American Funds Growth Fund of America R6 (RGAGX) a Strong Mutual Fund Pick Right Now?

If you have been looking for Large Cap Growth funds, a place to start could be American Funds Growth Fund of America R6 (RGAGX). RGAGX has a Zacks Mutual Fund Rank of 2 (Buy), which is based on various forecasting factors like size, cost, and past performance.ObjectiveRGAGX is classified in the Large Cap Growth segment by Zacks, an area full of possibilities. Companies are usually considered to be large-cap if their stock market valuation is more than $10 billion. Large Cap Growth mutual funds invest in many large U.S. firms that are projected to grow at a faster rate than their large-cap peers.History of Fund/ManagerAmerican Funds is based in Los Angeles, CA, and is the manager of RGAGX. Since American Funds Growth Fund of America R6 made its debut in May of 2009, RGAGX has garnered more than $45.15 billion in assets. The fund is currently managed by a team of investment professionals.PerformanceInvestors naturally seek funds with strong performance. This fund carries a 5-year annualized total return of 17.59%, and it sits 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 8.9%, 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. RGAGX's standard deviation over the past three years is 19.65% compared to the category average of 14.48%. Looking at the past 5 years, the fund's standard deviation is 19.64% compared to the category average of 15.46%. This makes the fund more volatile than its peers over the past half-decade.Risk FactorsThe fund has a 5-year beta of 1.11, so investors should note that it is hypothetically more 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. RGAGX's 5-year performance has produced a negative alpha of -2.11, which means managers in this portfolio find it difficult to pick securities that generate better-than-benchmark returns.ExpensesAs 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, RGAGX is a no load fund. It has an expense ratio of 0.29% compared to the category average of 0.95%. Looking at the fund from a cost perspective, RGAGX 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 $50Fees charged by investment advisors have not been taken into considiration. Returns would be less if those were included.Bottom LineOverall, American Funds Growth Fund of America R6 ( RGAGX ) has a high Zacks Mutual Fund rank, and in conjunction with its comparatively similar performance, average downside risk, and lower fees, American Funds Growth Fund of America R6 ( RGAGX ) looks like a great potential choice for investors right now.Your research on the Large Cap Growth segment doesn't have to stop here. You can check out all the great mutual fund tools we have to offer by going to www.zacks.com/funds/mutual-funds to see the additional features we offer 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.7 Best Stocks for the Next 30 DaysJust released: Experts distill 7 elite stocks from the current list of 220 Zacks Rank #1 Strong Buys. They deem these tickers "Most Likely for Early Price Pops."Since 1988, the full list has beaten the market more than 2X over with an average gain of +23.9% per year. So be sure to give these hand picked 7 your immediate attention. See them now >>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 (RGAGX): Fund Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks