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

Zacks Equity Research

If investors are looking at the Global - Equity fund category, make sure to pass over First Eagle Global Fund A (SGENX). SGENX holds a Zacks Mutual Fund Rank of 4 (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 responsible for SGENX, and the company is based out of New York, NY. First Eagle Global Fund A made its debut in April of 1970, and since then, SGENX has accumulated about $13.63 billion in assets, per the most up-to-date date available. 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 4.59% 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 6.85%, 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 9.42%, the standard deviation of SGENX over the past three years is 7.71%. Looking at the past 5 years, the fund's standard deviation is 8.2% compared to the category average of 9.84%. This makes the fund less volatile than its peers over the past half-decade.

Risk Factors

Investors cannot discount the risks to this segment though, as it is always important to remember the downside for any potential investment. In the most recent bear market, SGENX lost 31.61% and outperformed its peer group by 21.02%. These results could imply that the fund is a better choice than its peers during a sliding market environment.

Investors should not forget about beta, an important way to measure a mutual fund's risk compared to the market as a whole. SGENX has a 5-year beta of 0.63, which means it is likely to be less volatile than the market average. Because alpha represents a portfolio's performance on a risk-adjusted basis relative to a benchmark, which is the S&P 500 in this case, one should pay attention to this metric as well. The fund has produced a negative alpha over the past 5 years of -2.39, which shows 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, SGENX is a load fund. It has an expense ratio of 1.11% compared to the category average of 1.13%. Looking at the fund from a cost perspective, SGENX is actually cheaper than its peers.

This fund requires a minimum initial investment of $2,500, and each subsequent investment should be at least $100.

Bottom Line

Overall, First Eagle Global Fund A ( SGENX ) has a low Zacks Mutual Fund rank, similar performance, average downside risk, and lower fees compared to its peers.

Want even more information about SGENX? Then go over to Zacks.com and check out our mutual fund comparison tool, and all of the other great features that we have to help you with your mutual fund analysis for additional information. Zacks provides a full suite of tools to help you analyze your portfolio - both funds and stocks - in the most efficient way possible.


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