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.
NYSA Fund (NYSAX): This fund has an expense ratio of 4.01% and a management fee of 1%. 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. NYSAX 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. The fund has lagged performance-wise, so perhaps a simpler index future investing strategy might be more effective.
AB Allocation Market Real Return R (AMTRX): 1.55% expense ratio, 0.75%. AMTRX 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. This fund has yearly returns of 0.54% over the most recent five years. Another fund liable of having investors pay more in charges than what they receive in return.
Timothy Plan Fixed-Income C (TFICX) - 1.88% expense ratio, 0.6% management fee. TFICX is part of the Investment Grade Bond - Intermediate fund group. These mutual funds focus on the middle part of the curve, generally with bonds that usually mature in more than three years but less than 15 years. TFICX has generated annual returns of 0.96% over the last five years. Ouch!
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.
Neuberger Berman Mid Cap Growth Investor (NMANX): Expense ratio: 0.9%. Management fee: 0.76%. NMANX is a Mid Cap Growth mutual fund. These funds aim to target companies with a market capitalization between $2 billion and $10 billion that are also expected to exhibit more extensive growth opportunities for investors than their peers. This fund has achieved five-year annual returns of an astounding 10.82%.
MFS Mass Investors Growth Stock C (MIGDX): Expense ratio: 1.48%. Management fee: 0.33%. MIGDX 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. MIGDX has managed to produce a robust 13.14% over the last five years.
JPMorgan (NYSE:JPM) Small Cap Growth I (OGGFX) has an expense ratio of 0.99% and management fee of 0.65%. OGGFX is a Small Cap Growth mutual fund and tends to feature small companies in up-and-coming industries and markets. With yearly returns of 14.48% 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.
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Zacks Investment Research