Is Goldman Sachs Emerging Markets Equity A (GEMAX) a Strong Mutual Fund Pick Right Now?
Any investors hoping to find a Non US – Equity fund might consider looking past Goldman Sachs Emerging Markets Equity A (GEMAX). GEMAX possesses a Zacks Mutual Fund Rank of 4 (Sell), which is based on nine forecasting factors like size, cost, and past performance.
Zacks categorizes GEMAX as Non US – Equity, a segment stacked high with options. Non US – Equity mutual funds like to invest in companies outside of the United States, an important characteristic since global mutual funds are known to keep a good portion of their portfolio stateside. These kinds of funds can often extend across all cap levels, and will typically allocate their investments between emerging and developed markets.
History of Fund/Manager
GEMAX is a part of the Goldman Sachs family of funds, a company based out of New York, NY. Goldman Sachs Emerging Markets Equity A made its debut in December of 1997, and since then, GEMAX has accumulated about $154.21 million in assets, per the most up-to-date date available. The fund is currently managed by Basak Yavuz who has been in charge of the fund since February of 2015.
Of course, investors look for strong performance in funds. This fund in particular has delivered a 5-year annualized total return of 3.06%, and it sits 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 7.02%, 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. GEMAX’s standard deviation over the past three years is 14.61% compared to the category average of 9.89%. Looking at the past 5 years, the fund’s standard deviation is 14.36% compared to the category average of 9.82%. This makes the fund more volatile than its peers over the past half-decade.
Investors should always remember the downsides to a potential investment, and this segment carries some risks one should be aware of. GEMAX lost 64.64% in the most recent bear market and underperformed comparable funds by 6.19%. This could mean that the fund is a worse choice than comparable funds 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. GEMAX has a 5-year beta of 0.85, 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. The fund has produced a negative alpha over the past 5 years of -3.45, 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, GEMAX is a load fund. It has an expense ratio of 1.56% compared to the category average of 1.21%. From a cost perspective, GEMAX is actually more expensive than its peers.
While the minimum initial investment for the product is $1,000, investors should also note that each subsequent investment needs to be at least $50.
Overall, Goldman Sachs Emerging Markets Equity A ( GEMAX ) has a low Zacks Mutual Fund rank, and in conjunction with its comparatively strong performance, average downside risk, and higher fees, this fund looks like a poor potential choice for investors right now.
This could just be the start of your research on GEMAXin the Non US – Equity category. Consider going to www.zacks.com/funds/mutual-funds for additional information about this fund, and all the others that we rank as well for additional information. For analysis of the rest of your portfolio, make sure to visit Zacks.com for our full suite of tools which will help you investigate all of your stocks and funds in one place.
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