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.
The easiest way to judge a mutual fund's quality over time is by analyzing its performance and fees. Our Zacks Rank of over 19,000 mutual funds has identified some of the worst of the worst mutual funds you should avoid, the funds with the highest fees and poorest long-term performance.
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.
Eaton (NYSE:ETN) Vance Government Obligation C (ECGOX): Expense ratio: 1.94%. Management fee: 0.65%. After expenses, the 5 year return is 0.2%, meaning your fees are far higher than the fund's returns.
Madison Core Bond B (MBOBX): MBOBX is an Investment Grade Bond - Intermediate fund, which targets bonds that mature in more than three years but less than 15 years, and are a middle of the curve option for investors. MBOBX offers an expense ratio of 1.65% and annual returns of 1.52% over the last five years. Even if this fund can be positioned as a hedge during the recent bull-market, paying more in fees than returns over the long-term should never be an acceptable result.
Ivy Natural Resources C (IGNCX): This fund has an expense ratio of 2.46% and management fee of 0.85%. IGNCX is classified as a Sector - Energy mutual fund. Throughout the massive global energy sector, these funds hold a wide range of quickly changing and vitally important industries. With an annual average return of -4.4% over the last five years, the only thing absolute about this absolute return fund is that it absolutely deserves to be on our "worst offender" list.
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.
Neuberger Berman Mid Cap Growth Trust (NBMTX) is a fund that has an expense ratio of 0.95%, and a management fee of 0.9%. NBMTX is a Mid Cap Growth mutual fund. These mutual funds choose companies with a stock market valuation between $2 billion and $10 billion. With yearly returns of 10.76% over the last five years, this fund clearly wins.
Commerce Growth Fund (CFGRX): Expense ratio: 0.75%. Management fee: 0.4%. CFGRX is a Large Cap Growth option; these mutual funds purchase stakes in numerous large U.S. companies that are expected to develop and grow at a faster rate than other large-cap stocks. CFGRX has managed to produce a robust 14.69% over the last five years.
Harbor Large Cap Value Institutional (HAVLX) has an expense ratio of 0.68% and management fee of 0.6%. HAVLX is a Large Cap Value fund. These funds invest in stocks with a market cap of $10 billion of more, but whose share prices do not reflect their intrinsic value. With annual returns of 12.22% 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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Zacks Investment Research