Fund Authority Scores rate mutual funds and exchange traded funds (ETFs) on the most important economic factors that influence individual investors’ net long term diversified investment fund performance. The Skilled Investor developed the Fund Authority Score system to provide individual investors with concise and objective summaries of mutual funds and ETFs for comparisons within investment asset classes.
For a directory of the Fund Authority Score reports of other mutual funds and ETFs, go here. When you go to this Fund Authority Score directory, you can easily find a list of all fund reports at the bottom of each article for that particular investment asset class. For more information about how a Fund Authority Score is developed for each mutual fund or ETF, go here.
The diversified investment fund strategy of the American Funds’ Capital World Growth and Income mutual Fund
At approximately $110 billion in assets with 3.6 million shareholder accounts, the Capital World Growth and Income Fund is a very large actively managed mutual fund. This fund invests worldwide in companies with large stock market capitalizations, and it favors firms that pay dividends. The Capital World Growth and Income Fund has a variety of share classes which can only be purchased through an advisor or other financial intermediary – not directly.
The table below presents the Fund Authority Score and other information for the Capital World Growth and Income Fund – Class A Shares.
Using an integer scale ranging from -10 to +10, Fund Authority Scores measure five factors:
1) annualized management and investment sales expenses (40% weighting),
2) annual trading costs implied by investment fund portfolio turnover (30% weighting),
3) inferior and superior historical performance (20% weighting),
4) minimum fund maturity (5% weighting), and
5) minimum fund size for operating efficiency (5% weighting).
Fund Authority Summary for the American Funds - Capital World Growth and Income Fund - Class A Shares (CWGIX)
|Fund Authority Summary||American Funds - Capital World Growth and Income Fund||Fund Authority Score|
|FUND AUTHORITY SCORE (scale of -10 to +10)||2|
|FUND AUTHORITY SCORING COMPONENTS|
|A) Management expenses & sales loads (-4 to +4)|
|-- Annual expense ratio with 12b-1 fees||0.69%|
|-- Front-end sales load with 5 year amortization||1.15%|
|----- Total annual direct costs||1.84%||-3|
|B) Fund portfolio transactions costs (-3 to +3)|
|-- Annual turnover as a trading cost proxy||30%||2|
|C) Penalize very inferior historical performance and credit average and superior historical performance (-2 to +2)|
|-- Total of the 3 year Morningstar + Lipper ratings||10||2|
|D) Is this fund sufficiently mature? (0 or +1)||1|
|E) Very small fund efficiency penalty (-1 or 0)||0|
|INVESTMENT FUND OVERVIEW|
|-- Type of investment fund||mutual fund|
|-- Active versus passive management||actively managed fund|
|-- Total net assets||$109.8 Billion|
|-- Type of investment portfolio securities||stocks - equities|
|-- Geographic focus||worldwide|
|-- Market capitalization of portfolio securities||large|
|-- Strategy summary||capital growth + income & dividends|
|-- Target performance benchmark index||MSCI World Index|
|-- Year of inception||1993|
|-- Trading symbol||CWGIX|
|-- Share class evaluated||Class A Shares|
|-- Minimum initial deposit for individual investor||$250|
|TOP 10 SECURITY HOLDINGS||E.ON (EOA)|
|Banco Santander Central Hispano (SAN)|
|Microsoft Corporation (MSFT)|
|Novo-Nordisk A S|
|Koninklijke KPN (KPN)|
|Roche Holding Ltd (ROG)|
|AT&T Inc. (T)|
|----- Top 10 Investment Portfolio Holdings (%)||14.38%|
|Fund family website||www.americanfunds.com|
|Customer service telephone number||800-421-0180|
|SEC EDGAR filings and/or fund website accessed||24 November 2007|
– Most mutual funds and ETFs change their fees and trading strategies relatively little over time. Because investment expenses, trading/turnover costs, fund maturity, and operating efficiency account for 80% of the Fund Authority Score rating system, Fund Authority Scores tend to remain relatively stable over time for such consistent investment funds.
– The date in the table above indicates when fund information was accessed from SEC EDGAR filings and/or the fund company website. Normally, data used to develop Fund Authority Scores rely upon reporting periods ending the previous calendar quarter or half year.
– Unless otherwise stated, there are no business arrangements of any kind between The Skilled Investor and any financial product, service, or company that may be discussed in our publication’s articles.
– Fund Authority Scores are developed on a fund by fund basis. Just because a mutual fund or ETF has a high Fund Authority Score does not mean that other funds from that fund family do, as well. On your own, always be careful to check current management expenses, sales loads, portfolio turnover, fund maturity, fund size, fund performance, and other current factors before investing in any diversified investment fund.
– If you do not need and/or are unwilling to pay the direct and indirect costs of an investment counselor, stock broker, or other financial advisory intermediary, you should note that many mutual funds can be purchased directly from diversified investment fund families by accessing their websites or by calling their customer service telephone numbers. Similarly many ETFs can be purchased with lower transactions fees through discount brokers. (See these articles: Payment of Investment Advisors, Financial Planners, and Investment Counselors)
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