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.
High fees coupled with poor results: It's a straightforward equation for an awful mutual fund. Some are more regrettable than others - and some are bad to the point that they have got a "Strong Sell" from our Zacks Rank, the lowest positioning of the almost 19,000 mutual funds we rank every day.
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.
AllianzGI Ultra Micro Cap A (GUCAX): 1.8% expense ratio and 1.1% management fee. GUCAX is a Small Cap Growth mutual fund building their portfolio around stocks with market caps under $2 billion and large growth opportunities. With a five year after-costs return of 1.63%, you're for the most part paying more in charges than returns.
Templeton Frontier Markets C (FFRMX). Expense ratio: 2.71%. Management fee: 1.1%. Over the last 5 years, this fund has generated annual returns of -3.98%.
BTS Tactical Fixed Income A (BTFAX) - 1.49% expense ratio, 1% management fee. This fund has yielded yearly returns of 0.81% in the course of the last five years. Too bad!
3 Top Ranked Mutual Funds
There you have it: some prime examples of truly bad mutual funds. In contrast, here are a few funds that have achieved high Zacks Ranks and have low fees.
MSIF International Advantage I (MFAIX): Expense ratio: 0.98%. Management fee: 0.8%. MFAIX is a Global - Equity mutual fund investing in bigger markets like the U.S., Europe, and Japan; these kinds of funds aren't limited by geography. This fund has achieved five-year annual returns of an astounding 15.07%.
JPMorgan (NYSE:JPM) Large Cap Growth R6 (JLGMX) has an expense ratio of 0.43% and management fee of 0.45%. JLGMX 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. With annual returns of 15.52% over the last five years, this is a well-diversified fund with a long track record of success.
Columbia Acorn European Adv (CLOFX) is an attractive fund with a five-year annualized return of 10.74% and an expense ratio of just 1.19%. CLOFX is a Non US - Equity fund. Many of these funds like to allocate across emerging and developed markets, and will often focus on all cap levels.
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