If your advisor has you invested in any of these "Mutual Fund Misfires of the Market" with high fees and low returns, you need to rethink your 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.
Ivy Natural Resources B (IGNBX): Expense ratio: 3.78%. Management fee: 0.85%. After expenses, the 5 year return is -5.46%, meaning your fees are far higher than the fund's returns.
Loomis Sayles Limited Term G&A C (NECLX): 1.55% expense ratio, 0.37%. NECLX is a Government Bond - Short fund, and these funds hold securities issued by the U.S. federal government. This category focuses on the short end of the curve, and are seen as extremely low risk securities from a default perspective. This fund has yearly returns of 0.44% over the most recent five years. Another fund liable of having investors pay more in charges than what they receive in return.
Franklin US Government Security C (FRUGX) - 1.28% expense ratio, 0.45% management fee. FRUGX is a Government Mortgage - Intermediate mutual fund; these funds focus on the mortgage-backed securities (MBS) market and specifially, securities that have at least three years, but less than 10, to maturity. FRUGX has generated annual returns of 1.1% over the last five years. Ouch!
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.
Fidelity Blue Chip Growth (FBGRX) is a winner, with an expense ratio of just 0.8% and a five-year annualized return track record of 14.65%.
T. Rowe Price Small Cap Stock Fund (OTCFX) is a stand out fund. OTCFX is a Small Cap Blend mutual fund that usually targets companies with a market capitalization of less than $2 billion. With five-year annualized performance of 11.34% and expense ratio of 0.88%, this diversified fund is an attractive buy with a strong history of performance.
JPMorgan (NYSE:JPM) Mid Cap Growth I (HLGEX): Expense ratio: 0.92%. Management fee: 0.65%. HLGEX 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. HLGEX has produced a 12.05% over the last five years.
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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