Is American Funds EuroPacific Gr R6 (RERGX) A Strong Mutual Fund Pick Right Now?

There are plenty of choices in the Non US - Equity category, but where should you start your research? Well, one fund that might be worth investigating is American Funds EuroPacific Growth R6 RERGX. RERGX has a Zacks Mutual Fund Rank of 1 (Strong Buy), which is based on nine forecasting factors like size, cost, and past performance.

Objective

RERGX is classified in the Non US - Equity area by Zacks, and this segment is full of potential. Non US - Equity funds focus their investments on companies outside of the United States, which is an important distinction since global mutual funds tend to keep a sizable portion of their portfolio based in the United States. Most of these funds will allocate across emerging and developed markets, and can often extend across cap levels too.

History of Fund/Manager

American Funds is responsible for RERGX, and the company is based out of Los Angeles, CA. The American Funds EuroPacific Growth R6 made its debut in May of 2009 and RERGX has managed to accumulate roughly $51.10 billion in assets, as of the most recently available information. The fund is currently managed by a team of investment professionals.

Performance

Of course, investors look for strong performance in funds. This fund carries a 5-year annualized total return of 10.16%, 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 8.52% The fund's 3-year annualized total return of 8.52% places it in the middle third, a metric that will likely stand out if you prefer to look at shorter time frames.

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. Over the past three years, RERGX's standard deviation comes in at 11.14%, compared to the category average of 8.92%. Looking at the past 5 years, the fund's standard deviation is 10.58% compared to the category average of 12.08%. This makes the fund less volatile than its peers over the past half-decade.

Risk Factors

It's always important to be aware of the downsides to any future investment, so one should not discount the risks that come with this segment.

Investors should not forget about beta, an important way to measure a mutual fund's risk compared to the market as a whole. RERGX has a 5-year beta of 0.86, which means it is likely to be less 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. With a negative alpha of -2.27, managers in this portfolio find it difficult to pick securities that generate better-than-benchmark returns.

Expenses

Costs are increasingly important for mutual fund investing, and particularly as competition heats up in this market. And all things being equal, a lower cost product will outperform its otherwise identical counterpart, so taking a closer look at these metrics is key for investors. In terms of fees, RERGX is a no load fund. It has an expense ratio of 0.50% compared to the category average of 1.31%. So, RERGX is actually cheaper than its peers from a cost perspective.

Investors should also note that the minimum initial investment for the product is $250 and that each subsequent investment needs to be at $50.

Bottom Line

Overall, American Funds EuroPacific Growth R6 RERGX has a high Zacks Mutual Fund rank, and in conjunction with its comparatively strong performance, average downside risk, and lower fees, American Funds EuroPacific Growth R6 RERGX looks like a good potential choice for investors right now.

For additional information on this product, or to compare it to other mutual funds in the Non US - Equity, make sure to go to www.zacks.com/funds/mutual-funds 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.