You may need to start looking for a new financial advisor if your current one has put any of these high-fee, low-return "Mutual Fund Misfires of the Market" into your portfolio.
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.
Below, you'll read about some of the funds included in our current list of "Mutual Fund Misfires of the Market." And if by chance you're invested in any of these misfires, we'll help and review some of our highest Zacks Ranked mutual funds.
3 Mutual Fund Misfires
Now, let's take a look at three market misfires.
Pacific Advisors Small Cap I (PGISX): 5.21% expense ratio and 0.75% management fee. PGISX is a Small Cap Value mutual fund option, which typically invest in companies with market caps under $2 billion. With a five year after-costs return of -1.07%, you're for the most part paying more in charges than returns.
Templeton Global Balanced Fund C (FCGBX). Expense ratio: 1.95%. Management fee: 0.75%. Over the last 5 years, this fund has generated annual returns of 1.53%.
Victory INCORE Low Duration Bond K (RLDKX) - 1.27% expense ratio, 0.45% management fee. This fund has yielded yearly returns of 1.15% in the course of the last five years. Too bad!
3 Top Ranked Mutual Funds
Since you've seen the most noticeably lowest Zacks Ranked mutual funds, how about we take a look at some of the top ranked mutual funds with the least fees.
Columbia Select Large Cap Growth R5 (CGTRX) is a winner, with an expense ratio of just 0.72% and a five-year annualized return track record of 11.92%.
AllianzGI BestStylesU.S.EqtyFdCl R6 (ALSEX) is a stand out fund. ALSEX is part of the Large Cap Blend section, and these mutual funds most often invest in firms with a market capitalization of $10 billion or more. By investing in bigger companies, these funds offer more stability, and are often well-suited for investors with a "buy and hold" mindset. With five-year annualized performance of 10.52% and expense ratio of 0.4%, this diversified fund is an attractive buy with a strong history of performance.
BlackRock (NYSE:BLK) Advantage Small Cap Core I (BDSIX) has an expense ratio of 0.49% and management fee of 0.45%. BDSIX is a Small Cap Blend mutual fund, and usually targets stocks with market caps of less than $2 billion, letting investors diversify their funds among other kinds of small-cap equities. With yearly returns of 10.1% over the last five years, this fund is well-diversified with a long reputation of salutary performance.
Bottom Line
Along these lines, there you have it - if your financial guide has you put your money into any of our "Mutual Fund Misfires of the Market," there is a strong likelihood that they are either dormant at the worst possible time, inept, or (in all probability) filling their pockets with high fee commissions at the cost of your financial objectives.
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Zacks Investment Research