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Is First Eagle Global Fund A (SGENX) a Strong Mutual Fund Pick Right Now?

On the lookout for a Global - Equity fund? Starting with First Eagle Global Fund A SGENX should not be a possibility at this time. SGENX possesses a Zacks Mutual Fund Rank of 5 (Strong Sell), which is based on nine forecasting factors like size, cost, and past performance.

Objective

SGENX 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

First Eagle is based in New York, NY, and is the manager of SGENX. The First Eagle Global Fund A made its debut in April of 1970 and SGENX has managed to accumulate roughly $14.83 billion in assets, as of the most recently available information. Matthew B. McLennan is the fund's current manager and has held that role since September of 2008.

Performance

Of course, investors look for strong performance in funds. SGENX has a 5-year annualized total return of 8.14% 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 7.55%, which places it in the bottom 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 9.37%, the standard deviation of SGENX over the past three years is 7.5%. Looking at the past 5 years, the fund's standard deviation is 7.05% compared to the category average of 10.56%. 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. In SGENX's case, the fund lost 31.61% in the most recent bear market and outperformed its peer group by 20.82%. This makes the fund a possibly better choice than its peers during a sliding market environment.

Nevertheless, investors should also note that the fund has a 5-year beta of 0.62, which means it is hypothetically less volatile than the market at large. Alpha is an additional metric to take into consideration, since it represents a portfolio's performance on a risk-adjusted basis relative to a benchmark, which in this case, is the S&P 500. Over the past 5 years, the fund has a negative alpha of -1.39. This means that managers in this portfolio find it difficult to pick securities that generate better-than-benchmark returns.

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, SGENX is a load fund. It has an expense ratio of 1.11% compared to the category average of 1.20%. SGENX is actually cheaper than its peers when you consider factors like cost.

While the minimum initial investment for the product is $2,500, investors should also note that each subsequent investment needs to be at least $100.

Bottom Line

Overall, First Eagle Global Fund A has a low Zacks Mutual Fund rank, and in conjunction with its comparatively weak performance, average downside risk, and lower fees, this fund looks like a somewhat weak choice for investors right now.

For additional information on this product, or to compare it to other mutual funds in the Global - Equity, make sure to go to www.zacks.com/funds/mutual-funds for additional information. If you want to check out our stock reports as well, make sure to go to Zacks.com to see all of the great tools we have to offer, including our time-tested Zacks Rank.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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