Does your current advisor have your money invested in these "Mutual Fund Misfires of the Market" that charge high fees for low returns? If so, it may be time for a new advisor.
High fees plus poor performance: It's a pretty simple formula for a bad mutual fund. Some are worse than others - and some are so bad that they have earned a "Strong Sell" on the Zacks Rank, the lowest ranking of the nearly 19,000 mutual funds we rank daily.
First, let's break down some of the funds currently part of our "Mutual Fund Misfires of the Market." If you happen to have put your money into any of these misfires, we'll help assess some of our best Zacks Ranked mutual funds.
3 Mutual Fund Misfires
Now, let's take a look at three market misfires.
AQR Equity Market Neutral N (QMNNX): 1.55% expense ratio and 1.1% management fee. QMNNX is a Market Neutral - Equity mutual fund. These portfolios usually hold 50% of their securities in a long position, as well as 50% in a short position. With a five year after-costs return of 0.35%, you're for the most part paying more in charges than returns.
Oppenheimer SteelPath MLP Alph Plus I (MLPNX): 2.55% expense ratio, 1.25%. MLPNX is a Sector - Energy mutual fund, which encompasses a wide range of vastly changing and vitally important industries throughout this massive global sector. This fund has yearly returns of -9.31% over the most recent five years. Another fund liable of having investors pay more in charges than what they receive in return.
Arbitrage Tactical Equity I (ATQIX) - 2.18% expense ratio, 1.25% management fee. This fund has yielded yearly returns of 0.86% in the course of the last five years. Too bad!
3 Top Ranked Mutual Funds
Now that we've covered our "worst offender" list, let's take a look at some of Zacks' highest ranked mutual funds with some of the lowest fees you may want to consider.
Meridian Growth Institutional (MRRGX): 0.83% expense ratio and 0.76% management fee. MRRGX is a Small Cap Growth mutual fund and tends to feature small companies in up-and-coming industries and markets. With an annual return of 10.43% over the last five years, this fund is a winner.
MassMutual Select Mid Cap Growth R4 (MEFFX) is a stand out fund. MEFFX is a Mid Cap Growth mutual fund. These mutual funds choose companies with a stock market valuation between $2 billion and $10 billion. With five-year annualized performance of 11.93% and expense ratio of 1.16%, this diversified fund is an attractive buy with a strong history of performance.
RBC Global Opportunities I (RGOIX) has an expense ratio of 0.86% and management fee of 0.76%. RGOIX is a Global - Equity mutual fund. These funds invest in large markets like the U.S., Europe, and Japan, and operate with very few geographical limitations. With annual returns of 12.14% over the last five years, this fund is a well-diversified fund with a long track record of success.
Bottom Line
We hope that your investment advisor (if you use one) has you invested in one or all of the top-ranked mutual funds we've reviewed. But if that is not the case, and your advisor has you invested in any of the funds on our "worst offender" list, it might be time to have a conversation or reconsider this vitally important relationship.
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