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Is American Century Emerging Market Investor (TWMIX) a Strong Mutual Fund Pick Right Now?

Zacks Equity Research

Having trouble finding a Non US - Equity fund? American Century Emerging Market Investor (TWMIX) is a potential starting point. TWMIX has a Zacks Mutual Fund Rank of 1 (Strong Buy), which is based on nine forecasting factors like size, cost, and past performance.

Objective

TWMIX 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 Century is based in Kansas City, MO, and is the manager of TWMIX. American Century Emerging Market Investor debuted in September of 1997. Since then, TWMIX has accumulated assets of about $604.18 million, according to the most recently available information. The fund is currently managed by Patricia Ribeiro who has been in charge of the fund since May of 2006.

Performance

Of course, investors look for strong performance in funds. This fund has delivered a 5-year annualized total return of 4.94%, and is in the top third among its category peers. Investors who prefer analyzing shorter time frames should look at its 3-year annualized total return of 8.53%, 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. Over the past three years, TWMIX's standard deviation comes in at 14.56%, compared to the category average of 10.19%. The standard deviation of the fund over the past 5 years is 14.82% compared to the category average of 10.3%. This makes the fund more volatile than its peers over the past half-decade.

Risk Factors

One cannot ignore the volatility of this segment, however, as it is always important for investors to remember the downside to any potential investment. In TWMIX's case, the fund lost 68.12% in the most recent bear market and underperformed comparable funds by 9%. This might suggest that the fund is a worse choice than its peers during a bear market.

Investors should not forget about beta, an important way to measure a mutual fund's risk compared to the market as a whole. TWMIX has a 5-year beta of 0.81, which means it 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. With a negative alpha of -3.13, managers in this portfolio find it difficult to pick securities that generate better-than-benchmark returns.

Expenses

As competition heats up in the mutual fund market, costs become increasingly important. Compared to its otherwise identical counterpart, a low-cost product will be an outperformer, all other things being equal. Thus, taking a closer look at cost-related metrics is vital for investors. In terms of fees, TWMIX is a no load fund. It has an expense ratio of 1.25% compared to the category average of 1.25%. TWMIX is actually on par with its peers when you consider factors like cost.

Investors should also note that the minimum initial investment for the product is $2,500 and that each subsequent investment needs to be at $50.

Bottom Line

Overall, American Century Emerging Market Investor ( TWMIX ) has a high Zacks Mutual Fund rank, and in conjunction with its comparatively strong performance, average downside risk, and on par fees, this fund looks like a good potential choice for investors right now.

Don't stop here for your research on Non US - 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 TWMIX to its peers as well for additional information. And don't forget, Zacks has all of your needs covered on the equity side too! Make sure to check out Zacks.com for more information on our screening capabilities, Rank, and all our articles as well.


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