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.
How can you tell a good mutual fund from a bad one? It's pretty basic: If the fund has high fees and performs poorly, it's not good. Of course, there's a range - but when a mutual fund earns a Zacks Rank of #5 (Strong Sell) that means it's among the worst of roughly 19,000 funds we rate each 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.
JPMorgan (NYSE:JPM) International Value I (JIESX): This fund has an expense ratio of 0.76% and a management fee of 0.6%. 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. JIESX 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 Cundill Global Value C (ICDCX): 2.13% expense ratio, 1%. ICDCX is a Global - Equity mutual fund, which invests their assets in large markets, leveraging the global economy. This fund has yearly returns of -1.45% over the most recent five years. Another fund liable of having investors pay more in charges than what they receive in return.
ProFunds Telecom UltraSector Investor (TCPIX) - 1.83% 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
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.
Columbia Select Large Cap Equity Fund Z (NSEPX): Expense ratio: 0.55%. Management fee: 0.76%. NSEPX is part of the Large Cap Blend section, and these mutual funds most often invest in firms with a market capitalization of $10 billion or more. By investing in bigger companies, these funds offer more stability, and are often well-suited for investors with a "buy and hold" mindset. This fund has achieved five-year annual returns of an astounding 10.54%.
Principal Mid Cap R3 (PMBMX) is a stand out fund. PMBMX is a Mid Cap Growth mutual fund. Mid Cap Growth funds pick stocks--usually companies with a market cap between $2 billion and $10 billion--that demonstrate extensive growth opportunities for investors compared to their peers. With five-year annualized performance of 12.94% and expense ratio of 1.16%, this diversified fund is an attractive buy with a strong history of performance.
Calvert Equity Portfolio I (CEYIX) has an expense ratio of 0.71% and management fee of 0.61%. CEYIX 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. With yearly returns of 14.41% over the last five years, this fund is well-diversified with a long reputation of salutary performance.
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.
If you have concerns or any doubts about your investment advisor, read our just-released report:
4 Warning Signs That Your Advisor Might be Sabotaging Your Financial Future
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