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.
Janus Henderson Europe Focus A (HFEAX): 1.31% expense ratio and 0.93% management fee. HFEAX is a Europe - Equity mutual fund option, and these funds tend to invest their assets in stocks across the European continent, including countries such as Great Britain, Germany, France, Italy, and Spain. With a five year after-costs return of -3.56%, you're for the most part paying more in charges than returns.
RBC Emerging Markets Small Cap Equity I (RESIX): RESIX is a Non US - Equity option, focusing their investments acoss emerging and developed markets, and can often extend across cap levels too. RESIX offers an expense ratio of 1.45% and annual returns of -0.38% 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.
ProFunds Telecom UltraSector Investor (TCPIX) - 1.8% expense ratio, 0.75% management fee. This fund has yielded yearly returns of 1.3% in the course of the last five years. Too bad!
3 Top Ranked Mutual Funds
Now that you've seen the worst Zacks Ranked mutual funds, let's have a look at some of the highest ranked funds with the lowest fees.
Putnam Growth Opportunities R5 (PGODX): Expense ratio: 0.76%. Management fee: 0.58%. PGODX is a part of the Large Cap Growth mutual fund category, which invest in many large U.S. companies that are expected to grow much faster compared to other large-cap stocks. This fund has achieved five-year annual returns of an astounding 13.47%.
Brown Advisory Flexible Equity Institutional (BAFFX): Expense ratio: 0.57%. Management fee: 0.44%. BAFFX is classified as an Allocation Balanced fund, which seeks to invest in a balance of asset types, like stocks, bonds, and cash, and including precious metals or commodities is not unusual. BAFFX has managed to produce a robust 10.56% over the last five years.
MFS Mid-Cap Growth Fund R2 (MCPRX) has an expense ratio of 1.34% and management fee of 0.71%. MCPRX 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 13.26% over the last five years, this fund is well-diversified with a long reputation of salutary performance.
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.
Do You Know the Top 9 Retirement Investing Mistakes?
Whether you're planning to retire early or not, don't let investing mistakes derail your plans.
If you have $500,000 or more to invest and want to learn more, click the link to download our free report, 9 Retirement Mistakes that will Ruin Your Retirement.
This report will help you steer clear of the most common mistakes, like trying to time the market, lack of diversification in your portfolio, and many more. Get Your FREE Guide Now
Get Your Free (BAFFX): Fund Analysis Report
Get Your Free (TCPIX): Fund Analysis Report
Get Your Free (RESIX): Fund Analysis Report
Get Your Free (HFEAX): Fund Analysis Report
Get Your Free (MCPRX): Fund Analysis Report
Get Your Free (PGODX): Fund Analysis Report
Original post
Zacks Investment Research