Any investors hoping to find a Mutual Fund Equity Report fund could think about starting with American Funds Growth Fund of America C (GFACX). GFACX possesses a Zacks Mutual Fund Rank of 2 (Buy), which is based on various forecasting factors like size, cost, and past performance.
History of Fund/Manager
American Funds is responsible for GFACX, and the company is based out of Los Angeles, CA. American Funds Growth Fund of America C debuted in March of 2001. Since then, GFACX has accumulated assets of about $3.03 billion, according to the most recently available information. A team of investment professionals is the fund’s current manager.
Performance
Of course, investors look for strong performance in funds. GFACX has a 5-year annualized total return of 7.88% and is in the bottom third among its category peers. Investors who prefer analyzing shorter time frames should look at its 3-year annualized total return of 7.46%, which places it in the middle 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 17.52%, the standard deviation of GFACX over the past three years is 20.43%. Looking at the past 5 years, the fund’s standard deviation is 20.21% compared to the category average of 15.43%. This makes the fund more volatile than its peers over the past half-decade.
Risk Factors
Investors should not forget about beta, an important way to measure a mutual fund’s risk compared to the market as a whole. GFACX has a 5-year beta of 1.04, which means it is likely to be more volatile than the market average. 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. The fund has produced a negative alpha over the past 5 years of -2.92, which shows that managers in this portfolio find it difficult to pick securities that generate better-than-benchmark returns.
Holdings
Examining the equity holdings of a mutual fund is also a valuable exercise. This can show us how the manager is applying their stated methodology, as well as if there are any inherent biases in their approach. For this particular fund, the focus is mostly on equities that are traded in the United States.
This fund is currently holding about 87.88% stock in stocks, which have an average market capitalization of $242.63 billion. The fund has the heaviest exposure to the following market sectors:
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Technology
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Industrial Cyclical
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Finance
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Retail Trade
Turnover is 34%, which means this fund makes fewer trades than the average comparable fund.
Expenses
For 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, GFACX is a no load fund. It has an expense ratio of 1.38% compared to the category average of 0.99%. Looking at the fund from a cost perspective, GFACX is actually more expensive 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.
Bottom Line
Overall, American Funds Growth Fund of America C ( GFACX ) has a high Zacks Mutual Fund rank, and in conjunction with its comparatively weak performance, average downside risk, and higher fees, American Funds Growth Fund of America C ( GFACX ) looks like a good potential choice for investors right now.
For additional information on the Mutual Fund Equity Report area of the mutual fund world, make sure to check out www.zacks.com/funds/mutual-funds. There, you can see more about the ranking process, and dive even deeper into GFACX too for additional information. And don’t forget, Zacks has all of your needs covered on the equity side too! Make sure to check out Zacks.com for more information on our screening capabilities, Rank, and all our articles as well.
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