AEPGX
American Funds Europacific Growth-A
Exploring AEPGX’s Global Reach
The American Funds Europacific Growth-A (AEPGX) is designed to provide long-term capital growth by investing in companies located outside the United States, primarily in Europe and the Pacific Basin. This fund is part of the Foreign-Large Growth category, which focuses on large-cap international stocks with growth potential. AEPGX’s strategy involves investing in a diverse range of companies, from small firms to large corporations, offering investors exposure to a broad spectrum of international markets. This approach allows investors to benefit from the growth opportunities present in these regions, which are often driven by different economic cycles compared to the U.S. market.
At A Glance
Executive Summary
AEPGX offers diversified exposure to European and Pacific stocks with a competitive 0.85% expense ratio, ideal for growth-focused investors.
Exposure to diverse international markets Strong historical performance Managed by experienced American Funds team
Higher expense ratio than some peers Potential currency risk Recent underperformance compared to benchmark
Performance Analysis: AEPGX vs. Benchmark
AEPGX has shown a mixed performance when compared to its benchmark, the MSCI ACWI xUS DivAdj Index (A-XUS). Over the past year, AEPGX delivered a return of 17.01%, slightly underperforming the benchmark’s 17.25%. However, the fund’s long-term performance remains robust, with an inception return of 8.59%. Despite recent underperformance, AEPGX’s historical returns suggest a strong potential for growth, especially for investors looking to diversify their portfolios with international exposure. The fund’s performance is influenced by its strategic allocation in high-growth sectors and regions, which can lead to significant returns during favorable market conditions.
Sector Allocation: A Focus on Technology and Industrials
AEPGX’s portfolio is heavily weighted towards the Technology and Industrials sectors, which together account for over 34% of its total holdings. This allocation reflects the fund’s strategy to capitalize on the growth potential of these sectors, particularly in international markets where technological advancements and industrial expansion are prominent. The fund’s top holdings, such as Taiwan Semiconductor Manufacturing and SAP SE, highlight its focus on leading companies within these sectors. This strategic allocation not only positions AEPGX to benefit from technological innovations but also from the industrial growth in emerging and developed markets.
Risk Metrics: Understanding AEPGX’s Volatility
Investors should be aware of AEPGX’s risk metrics, which provide insight into the fund’s volatility and potential returns. With a beta of 1.07, the fund is slightly more volatile than the market, indicating a higher level of risk. The Sharpe Ratio of -0.02 suggests that the fund has not been able to generate positive returns relative to its risk level recently. However, the fund’s R-Squared value of 88.41% indicates a strong correlation with its benchmark, suggesting that its performance is largely influenced by market movements. Understanding these metrics is crucial for investors who are considering AEPGX as part of their portfolio, as it helps them gauge the potential risks and rewards associated with the fund.
Comparative Analysis: AEPGX vs. Similar Funds
When compared to similar funds, AEPGX presents a competitive option for investors seeking international growth. While its expense ratio of 0.85% is higher than some peers like BlackRock Advantage International-InvA (BROAX) with 0.75%, AEPGX offers a unique portfolio composition with a strong focus on European and Pacific markets. Its 1-year return of 17.01% is comparable to peers such as BNY Mellon Worldwide Growth-A (PGROX) at 17.73%. However, investors should consider the fund’s higher beta, which indicates greater volatility compared to some alternatives. This comparative analysis helps investors weigh the benefits and drawbacks of AEPGX relative to other options in the market.
Top Holdings: Strategic Investments in Leading Companies
AEPGX’s top holdings reflect its strategic investment approach, focusing on leading companies across various sectors. The fund’s largest holding, the Capital Group Central Cash Fund, accounts for 4.45% of its portfolio, providing liquidity and stability. Other significant investments include Taiwan Semiconductor Manufacturing and Novo Nordisk, which are leaders in the Technology and Health Care sectors, respectively. These holdings demonstrate AEPGX’s commitment to investing in companies with strong growth prospects and market leadership. By selecting top-performing companies, the fund aims to deliver superior returns to its investors while maintaining a diversified portfolio.
Market Cap Allocation: Emphasizing Large and Extra-Large Companies
AEPGX’s market cap allocation is heavily skewed towards large and extra-large companies, which together make up nearly 88% of its portfolio. This focus on larger companies aligns with the fund’s strategy to invest in established firms with proven track records and significant market influence. Large-cap companies often provide stability and consistent growth, making them attractive to investors seeking long-term capital appreciation. The fund’s emphasis on extra-large companies, such as Airbus SE and Reliance Industries, further underscores its commitment to investing in industry leaders with the potential to drive substantial returns.
Conclusion: AEPGX’s Suitability for Growth-Oriented Investors
In conclusion, the American Funds Europacific Growth-A (AEPGX) stands out as a compelling option for growth-oriented investors seeking international exposure. With its strategic focus on high-growth sectors and regions, the fund offers the potential for significant capital appreciation. While its expense ratio is higher than some peers, AEPGX’s diversified portfolio and strong historical performance make it an attractive choice for those looking to diversify their investments beyond the U.S. market. Investors should consider their risk tolerance and investment goals when evaluating AEPGX, as its higher volatility may not suit all profiles. Overall, AEPGX is well-suited for investors aiming to capitalize on global growth opportunities.
Similar Securities
AEPGX: American Funds Europacific Growth-A | Foreign-Large Growth Investment
AEPGX offers diversified exposure to European and Pacific stocks with a competitive 0.85% expense ratio, ideal for growth-focused investors.
AIIEX: Invesco EQV International Equity-A | International Growth Opportunities
AIIEX offers international growth with a focus on strong earnings momentum, featuring a diversified portfolio and competitive returns.
AIVBX: American Funds Internat'l Vantage-A | Global Growth Investment
AIVBX offers 80% foreign equity exposure with a 0.99% expense ratio, focusing on growth in large-cap international markets.
FNGAX: Franklin International Growth-A | Foreign-Large Growth Fund Analysis
FNGAX offers exposure to non-U.S. mid-large cap equities with a focus on growth, boasting a 1-year return of 20.63% and a diverse sector allocation.
OIDAX: Invesco International Diversified-A | Global Growth Fund
OIDAX offers diversified international exposure with a focus on growth, featuring a high allocation to non-U.S. equities and a competitive yield.
Futher Reading
https://finance.yahoo.com/quote/AEPGX/”>Yahoo: American Funds Europacific Growth-A
https://ftcloud.fasttrack.net/web/chart/AEPGX
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