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

If you have been looking for Global - Equity funds, it would not be wise to start your search with First Eagle Global Fund A (SGENX). SGENX possesses a Zacks Mutual Fund Rank of 4 (Sell), which is based on nine forecasting factors like size, cost, and past performance.

Objective

Zacks categorizes SGENX 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

First Eagle is based in New York, NY, and is the manager of SGENX. The First Eagle Global Fund A made its debut in April of 1970 and SGENX has managed to accumulate roughly $13.12 billion in assets, as of the most recently available information. The fund is currently managed by Matthew B. McLennan who has been in charge of the fund since September of 2008.

Performance

Obviously, what investors are looking for in these funds is strong performance relative to their peers. This fund in particular has delivered a 5-year annualized total return of 6.08%, and it sits in the bottom third among its category peers. Investors who prefer analyzing shorter time frames should look at its 3-year annualized total return of 9.48%, which places it in the middle 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 SGENX over the past three years is 7.28% compared to the category average of 9.3%. Looking at the past 5 years, the fund's standard deviation is 7.14% compared to the category average of 9.06%. This makes the fund less 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. SGENX lost 31.61% in the most recent bear market and underperformed its peer group by 20.83%. This might suggest that the fund is a worse choice than its peers during a bear market.

Investors should note that the fund has a 5-year beta of 0.62, so it is likely going to be less volatile than the market at large. 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. SGENX has generated a negative alpha over the past five years of -2.37, demonstrating that managers in this portfolio find it difficult to pick securities that generate better-than-benchmark returns.

Expenses

For investors, taking a closer look at cost-related metrics is key, since costs are increasingly important for mutual fund investing. Competition is heating up in this space, and a lower cost product will likely outperform its otherwise identical counterpart, all things being equal. In terms of fees, SGENX is a load fund. It has an expense ratio of 1.10% compared to the category average of 1.19%. So, SGENX is actually cheaper than its peers from a cost perspective.

Investors need to be aware that with this product, the minimum initial investment is $2,500; each subsequent investment needs to be at least $100.

Bottom Line

Overall, First Eagle Global Fund A ( SGENX ) has a low Zacks Mutual Fund rank, and in conjunction with its comparatively weak performance, average downside risk, and lower fees, First Eagle Global Fund A ( SGENX ) looks like a somewhat weak choice for investors right now.

For additional information on this product, or to compare it to other mutual funds in the Global - Equity, make sure to go to www.zacks.com/funds/mutual-funds 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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