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.
The easiest way to judge a mutual fund's quality over time is by analyzing its performance and fees. Our Zacks Rank of over 19,000 mutual funds has identified some of the worst of the worst mutual funds you should avoid, the funds with the highest fees and poorest long-term performance.
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.
Columbia Disciplined Small Core C (LSMCX): Expense ratio: 2.1%. Management fee: 0.85%. After expenses, the 5 year return is 1.78%, meaning your fees are far higher than the fund's returns.
Sterling Capital Intermediate US Government C (BIUCX): BIUCX is a Government Bond - Intermediate mutual fund. Government Bond - Intermediate funds hold securities issued by the federal government of the United States, and are often seen as risk-free assets; they are also described as extremely low-risk from a default perspective. BIUCX offers an expense ratio of 1.56% and annual returns of 0.66% 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.
Loomis Sayles Limited Term G&A C (NECLX) - 1.55% expense ratio, 0.37% management fee. NECLX is a Government Bond - Short fund, and these funds hold securities issued by the U.S. federal government. This category focuses on the short end of the curve, and are seen as extremely low risk securities from a default perspective. NECLX has generated annual returns of 0.44% over the last five years. Ouch!
3 Top Ranked Mutual Funds
Since you've seen the most noticeably lowest Zacks Ranked mutual funds, how about we take a look at some of the top ranked mutual funds with the least fees.
Fidelity Select Technology (FSPTX) is a fund that has an expense ratio of 0.71%, and a management fee of 0.54%. FSPTX is part of the Sector - Tech mutual fund category that invests in technology and lets investors own a stake in a notoriously volatile sector, but with a much more diversified approach. With yearly returns of 19.94% over the last five years, this fund clearly wins.
Janus Henderson Research D (JNRFX) is a stand out fund. JNRFX 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 five-year annualized performance of 12.19% and expense ratio of 0.68%, this diversified fund is an attractive buy with a strong history of performance.
JPMorgan (NYSE:JPM) Equity Income Fund R6 (OIEJX): Expense ratio: 0.48%. Management fee: 0.4%. OIEJX is a Large Cap Blend fund, targeting companies with market caps of over $10 billion. These funds offer investors a stability, and are perfect for people with a "buy and hold" mindset. OIEJX has produced a 10.04% over the last five years.
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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