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.
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.
Alger International Growth C (ALGCX): This fund has an expense ratio of 2.21% and a management fee of 0.71%. Without even doing any in-depth analysis, just the fact that you are paying more in fees than you're earning in returns is reason enough not to invest. ALGCX is a Non US - Equity option, focusing their investments acoss emerging and developed markets, and can often extend across cap levels too. The fund has lagged performance-wise, so perhaps a simpler index future investing strategy might be more effective.
Ivy Municipals Bond C (WMBCX): 1.72% expense ratio, 0.51% management fee. WMBCX is a Muni - Bonds mutual fund; these funds invest in debt securities issued by states and local municipalities, which are typically used to pay for infrastructure construction, schools, and other government functions. This fund has an annual returns of 1.57% over the last five years. Another fund guilty of having investors pay more in fees than returns.
AB Unconstrained Bond A (AGSAX) - 0.9% expense ratio, 0.5% management fee. This fund has yielded yearly returns of -0.33% in the course of the last five years. Too bad!
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.
Victory Sycamore Established Value I (VEVIX) is a winner, with an expense ratio of just 0.61% and a five-year annualized return track record of 10.46%.
Janus Henderson Research I (JRAIX): Expense ratio: 0.62%. Management fee: 0.56%. JRAIX is a Large Cap Growth mutual fund, and these funds invest in many large U.S. firms that are projected to grow at a faster rate than their large-cap peers. JRAIX has managed to produce a robust 12.28% over the last five years.
VALIC Company I Small Cap Aggressive Growth (VSAGX): Expense ratio: 0.01%. Management fee: 0.85%. VSAGX is a Small Cap Growth mutual fund and tends to feature small companies in up-and-coming industries and markets. VSAGX has produced a 11.55% 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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