Is American Funds Global Growth A (PGGAX) a Strong Mutual Fund Pick Right Now?
There are plenty of choices in the Global - Equity category, but where should you start your research? Well, one fund that you should consider investigating is American Funds Global Growth A (PGGAX). PGGAX carries a Zacks Mutual Fund Rank of 3 (Hold), which is based on nine forecasting factors like size, cost, and past performance.
Zacks categorizes PGGAX as Global - Equity, which is a segment packed with options. Global - Equity mutual funds invest in large markets like the U.S., Europe, and Japan, and operate with very few geographical limitations. They also provide an investment technique that leverages the diverse nature of the global economy in the hopes of providing a stable return.
History of Fund/Manager
PGGAX is a part of the American Funds family of funds, a company based out of Los Angeles, CA. American Funds Global Growth A debuted in May of 2012. Since then, PGGAX has accumulated assets of about $1.74 billion, according to the most recently available information. A team of investment professionals is the fund's current manager.
Of course, investors look for strong performance in funds. This fund carries a 5-year annualized total return of 6.99%, and it sits in the middle third among its category peers. Investors who prefer analyzing shorter time frames should look at its 3-year annualized total return of 11.7%, which places it in the top 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. The standard deviation of PGGAX over the past three years is 10.65% compared to the category average of 9%. The fund's standard deviation over the past 5 years is 11.11% compared to the category average of 9.38%. This makes the fund more volatile than its peers over the past half-decade.
One cannot ignore the volatility of this segment, however, as it is always important for investors to remember the downside to any potential investment.
Nevertheless, with a 5-year beta of 0.91, the fund is likely to be less volatile than the market average. 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. PGGAX has generated a negative alpha over the past five years of -2.64, demonstrating that managers in this portfolio find it difficult to pick securities that generate better-than-benchmark returns.
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, PGGAX is a load fund. It has an expense ratio of 0.39% compared to the category average of 1.13%. So, PGGAX 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.
Overall, American Funds Global Growth A ( PGGAX ) has a neutral Zacks Mutual Fund rank, similar performance, average downside risk, and lower fees compared to its peers.
This could just be the start of your research on PGGAXin the Global - Equity 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. 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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