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.
Virtus Equity Trend C (VAPCX): 2.3% expense ratio and 1% management fee. VAPCX 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. With a five year after-costs return of 0.66%, you're for the most part paying more in charges than returns.
Clearbridge International Value I (SBIYX): SBIYX 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. SBIYX offers an expense ratio of 0.9% and annual returns of -1.91% 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.
Iron Strategic Income Fund Investor (IRNIX) - 1.45% expense ratio, 0.65% management fee. This fund has yielded yearly returns of 0.52% 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.
AT Disciplined Equity Fund (AWEIX) is a winner, with an expense ratio of just 0.75% and a five-year annualized return track record of 11.69%.
MassMutual Select Mid Cap Growth R4 (MEFFX) has an expense ratio of 1.16% and management fee of 0.69%. MEFFX 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. Thanks to yearly returns of 11.46% over the last five years, MEFFX is an effectively diversified fund with a long reputation of solidly positive performance.
MSIF Global Opportunity Portfolio I (MGGIX) has an expense ratio of 0.92% and management fee of 0.74%. MGGIX is a Global - Equity mutual fund, which invests their assets in large markets, leveraging the global economy. With annual returns of 16.93% over the last five years, this fund is a well-diversified fund with a long track record of success.
Bottom Line
We hope that your investment advisor (if you use one) has you invested in one or all of the top-ranked mutual funds we've reviewed. But if that is not the case, and your advisor has you invested in any of the funds on our "worst offender" list, it might be time to have a conversation or reconsider this vitally important relationship.
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
This report can help you avoid the costly mistake of picking or sticking with the wrong investment advisor. Click here for free report>>
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Zacks Investment Research