Advertisement
New Zealand markets closed
  • NZX 50

    12,105.29
    +94.63 (+0.79%)
     
  • NZD/USD

    0.5982
    -0.0024 (-0.40%)
     
  • NZD/EUR

    0.5537
    -0.0006 (-0.11%)
     
  • ALL ORDS

    8,153.70
    +80.10 (+0.99%)
     
  • ASX 200

    7,896.90
    +77.30 (+0.99%)
     
  • OIL

    82.98
    +1.63 (+2.00%)
     
  • GOLD

    2,242.00
    +29.30 (+1.32%)
     
  • NASDAQ

    18,249.16
    -31.68 (-0.17%)
     
  • FTSE

    7,952.62
    +20.64 (+0.26%)
     
  • Dow Jones

    39,789.65
    +29.57 (+0.07%)
     
  • DAX

    18,492.49
    +15.40 (+0.08%)
     
  • Hang Seng

    16,541.42
    +148.58 (+0.91%)
     
  • NIKKEI 225

    40,168.07
    -594.66 (-1.46%)
     
  • NZD/JPY

    90.4790
    -0.3010 (-0.33%)
     

Is American Funds New Perspective F (NPFFX) a Strong Mutual Fund Pick Right Now?

Abbott (ABT) reported earnings 30 days ago. What's next for the stock? We take a look at earnings estimates for some clues.

There are plenty of choices in the Global - Equity category, but where should you start your research? Well, one fund that might be worth investigating is American Funds New Perspective F NPFFX. NPFFX bears a Zacks Mutual Fund Rank of 2 (Buy), which is based on nine forecasting factors like size, cost, and past performance.

Objective

NPFFX 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

American Funds is based in Los Angeles, CA, and is the manager of NPFFX. American Funds New Perspective F made its debut in March of 1973, and since then, NPFFX has accumulated about $1.72 billion in assets, per the most up-to-date date available. The fund is currently managed by a team of investment professionals.

ADVERTISEMENT

Performance

Of course, investors look for strong performance in funds. NPFFX has a 5-year annualized total return of 12.47% and is in the top third among its category peers. If you're interested in shorter time frames, do not dismiss looking at the fund's 3-year annualized total return of 10.95%, 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. NPFFX's standard deviation over the past three years is 10.9% compared to the category average of 8.91%. Looking at the past 5 years, the fund's standard deviation is 10.46% compared to the category average of 8.81%. This makes the fund more volatile than its peers over the past half-decade.

Risk Factors

Investors should always remember the downsides to a potential investment, and this segment carries some risks one should be aware of. In the most recent bear market, NPFFX lost 49.06% and outperformed its peer group by 3.34%. This makes the fund a possibly better choice than its peers during a sliding market environment.

Even still, the fund has a 5-year beta of 0.96, so investors should note that it is hypothetically less volatile than 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. Over the past 5 years, the fund has a negative alpha of -1.29. This means that 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, NPFFX is a no load fund. It has an expense ratio of 0.83% compared to the category average of 1.20%. Looking at the fund from a cost perspective, NPFFX is actually cheaper than its peers.

Investors need to be aware that with this product, the minimum initial investment is $250; each subsequent investment needs to be at least $50.

Bottom Line

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

Don't stop here for your research on Global - Equity funds. We also have plenty more on our site in order to help you find the best possible fund for your portfolio. Make sure to check out www.zacks.com/funds/mutual-funds for more information about the world of funds, and feel free to compare NPFFX to its peers as well for additional information. If you are more of a stock investor, make sure to also check out our Zacks Rank, and our full suite of tools we have available for novice and professional investors alike.


View All Zacks #1 Ranked Mutual Funds
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 (NPFFX): Fund Analysis Report
 
To read this article on Zacks.com click here.
 
Zacks Investment Research