Is American Funds Growth Portfolio A (GWPAX) a Strong Mutual Fund Pick Right Now?
If you've been stuck searching for Large Cap Growth funds, consider American Funds Growth Portfolio A (GWPAX) as a possibility. GWPAX holds a Zacks Mutual Fund Rank of 1 (Strong Buy), which is based on various forecasting factors like size, cost, and past performance.ObjectiveWe classify GWPAX in the Large Cap Growth category, an area rife with potential choices. Large Cap Growth funds invest in many large U.S. companies that are expected to grow much faster compared to other large-cap stocks. To be considered large-cap, companies must have a market cap over $10 billion.History of Fund/ManagerAmerican Funds is responsible for GWPAX, and the company is based out of Los Angeles, CA. The American Funds Growth Portfolio A made its debut in May of 2012 and GWPAX has managed to accumulate roughly $11.88 billion in assets, as of the most recently available information. The fund's current manager is a team of investment professionals.PerformanceOf course, investors look for strong performance in funds. This fund in particular has delivered a 5-year annualized total return of 13.66%, and is in the top third among its category peers. Investors who prefer analyzing shorter time frames should look at its 3-year annualized total return of 23.19%, which places it in the top 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. The standard deviation of GWPAX over the past three years is 14.09% compared to the category average of 11.95%. Looking at the past 5 years, the fund's standard deviation is 16.83% compared to the category average of 13.31%. This makes the fund more volatile than its peers over the past half-decade.Risk FactorsInvestors should note that the fund has a 5-year beta of 1.03, which means it is hypothetically as volatile as 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. GWPAX has generated a negative alpha over the past five years of -3.62, demonstrating that managers in this portfolio find it difficult to pick securities that generate better-than-benchmark returns.ExpensesFor 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, GWPAX is a load fund. It has an expense ratio of 0.35% compared to the category average of 0.95%. So, GWPAX is actually cheaper than its peers from a cost perspective.While the minimum initial investment for the product is $250, investors should also note that each subsequent investment needs to be at least $50.Fees charged by investment advisors have not been taken into consideration. Returns would be less if those were included.Bottom LineOverall, American Funds Growth Portfolio A ( GWPAX ) 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.This could just be the start of your research on GWPAX in the Large Cap Growth 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. For analysis of the rest of your portfolio, make sure to visit Zacks.com for our full suite of tools which will help you investigate all of your stocks and funds in one place.5 Stocks Set to DoubleEach was handpicked by a Zacks expert as the #1 favorite stock to gain +100% or more in the coming year. While not all picks can be winners, previous recommendations have soared +112%, +171%, +209% and +232%.Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.Today, See These 5 Potential Home Runs >>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 (GWPAX): Fund Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks
Quelle: Zacks