Non US – Equity fund seekers should not consider taking a look at Van Eck Emerging Markets A (GBFAX) at this time. GBFAX holds a Zacks Mutual Fund Rank of 5 (Strong Sell), which is based on nine forecasting factors like size, cost, and past performance.
We classify GBFAX in the Non US – Equity category, which is an area rife with potential choices. Investing in companies outside the United States is how Non US – Equity funds set themselves apart, since global funds tend to keep a good portion of their portfolio stateside. Many of these funds like to allocate across emerging and developed markets, and will often focus on all cap levels.
History of Fund/Manager
Van Eck is responsible for GBFAX, and the company is based out of New York, NY. Van Eck Emerging Markets A debuted in January of 1994. Since then, GBFAX has accumulated assets of about $160.33 million, according to the most recently available information. The fund is currently managed by David A. Semple who has been in charge of the fund since October of 2003.
Of course, investors look for strong performance in funds. This fund has delivered a 5-year annualized total return of 12.24%, and it sits in the bottom third among its category peers. But if you are looking for a shorter time frame, it is also worth looking at its 3-year annualized total return of 9.49%, 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. GBFAX’s standard deviation over the past three years is 21.25% compared to the category average of 16.28%. The fund’s standard deviation over the past 5 years is 18.2% compared to the category average of 13.6%. This makes the fund more volatile than its peers over the past half-decade.
Investors should note that the fund has a 5-year beta of 0.86, so it is likely going to be less volatile than the market at large. 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 -1.94, which shows that managers in this portfolio find it difficult to pick securities that generate better-than-benchmark returns.
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, GBFAX is a load fund. It has an expense ratio of 1.47% compared to the category average of 1.18%. GBFAX is actually more expensive than its peers when you consider factors like cost.
Investors should also note that the minimum initial investment for the product is $1,000 and that each subsequent investment needs to be at $100.
Overall, Van Eck Emerging Markets A ( GBFAX ) has a low Zacks Mutual Fund rank, and in conjunction with its comparatively weak performance, average downside risk, and higher fees, Van Eck Emerging Markets A ( GBFAX ) looks like a somewhat weak choice for investors right now.
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