If your financial advisor made you buy any of these "Mutual Fund Misfires of the Market" with high expenses and low returns, you need to reassess your advisor.
How can you tell a good mutual fund from a bad one? It's pretty basic: If the fund has high fees and performs poorly, it's not good. Of course, there's a range - but when a mutual fund earns a Zacks Rank of #5 (Strong Sell) that means it's among the worst of roughly 19,000 funds we rate each day.
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.
MainStay Unconstrained Bond B (MASBX): 2.04% expense ratio and 0.57% management fee. MASBX is a Diversified Bonds investment option; these funds give investors exposure to a variety of fixed income types that span across different issuers, maturities, and credit levels. With a five year after-costs return of 1.43%, you're for the most part paying more in charges than returns.
Catalyst MLP & Infrastructure A (MLXAX): 1.68% expense ratio, 1.25% management fee. MLXAX 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 an annual returns of -7.96% over the last five years. Another fund guilty of having investors pay more in fees than returns.
Hussman Strategic Growth Fund (HSGFX): Expense ratio: 1.14%. Management fee: 0.9%. HSGFX 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 annual returns of just -8.98%, it's no surprise this fund has received Zacks' "Strong Sell" ranking.
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.
Fidelity Advisor Mega Cap Stock Z (FZALX) is a winner, with an expense ratio of just 0.53% and a five-year annualized return track record of 10.12%.
Brown Advisory Growth Equity Institutional (BAFGX) has an expense ratio of 0.7% and management fee of 0.59%. BAFGX is a Large Cap Growth mutual fund, and these funds invest in many large U.S. firms that are projected to grow at a faster rate than their large-cap peers. Thanks to yearly returns of 14.96% over the last five years, BAFGX is an effectively diversified fund with a long reputation of solidly positive performance.
Nicholas II Fund (NCTWX): Expense ratio: 0.6%. Management fee: 0.52%. NCTWX is a Mid Cap Growth mutual fund. These funds aim to target companies with a market capitalization between $2 billion and $10 billion that are also expected to exhibit more extensive growth opportunities for investors than their peers. NCTWX has produced a 11.29% over the last five years.
Bottom Line
So, there you have it - if your advisor has you invested in any of our "Mutual Fund Misfires of the Market," there is a good probability that they are either asleep at the wheel, incompetent, or (most likely) lining their pockets with high fee commissions at your financial expense.
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Original post
Zacks Investment Research