You may need to start looking for a new financial advisor if your current one has put any of these high-fee, low-return "Mutual Fund Misfires of the Market" into your portfolio.
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.
First, let's break down some of the funds currently part of our "Mutual Fund Misfires of the Market." If you happen to have put your money into any of these misfires, we'll help assess some of our best Zacks Ranked mutual funds.
3 Mutual Fund Misfires
Now, let's take a look at three market misfires.
AllianzGI Ultra Micro Cap A (GUCAX): This fund has an expense ratio of 1.86% and a management fee of 1.1%. 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. GUCAX is a Small Cap Growth mutual fund and tends to feature small companies in up-and-coming industries and markets. The fund has lagged performance-wise, so perhaps a simpler index future investing strategy might be more effective.
Transamerica Emerging Markets Equity A (AEMTX): 1.59% expense ratio, 0.92%. AEMTX is a Non US - Equity option, focusing their investments acoss emerging and developed markets, and can often extend across cap levels too. This fund has yearly returns of -1.15% over the most recent five years. Another fund liable of having investors pay more in charges than what they receive in return.
Invesco Global Mkt Neutral Fd Cl Y (MKNYX): This fund has an expense ratio of 1.24% and management fee of 0.95%. MKNYX is a Market Neutral - Equity mutual fund. These portfolios usually hold 50% of their securities in a long position, as well as 50% in a short position. With an annual average return of -3.7% over the last five years, the only thing absolute about this absolute return fund is that it absolutely deserves to be on our "worst offender" list.
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.
KP Large Cap Equity Institutional (KPLCX): Expense ratio: 0.3%. Management fee: 0.24%. KPLCX 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 10.69%.
BMO Large-Cap Growth Fund A (BALGX) has an expense ratio of 0.79% and management fee of 0.35%. BALGX 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 annual returns of 11.4% over the last five years, this is a well-diversified fund with a long track record of success.
Dreyfus/Boston Small/Mid-Cap Growth Y (DBMYX) has an expense ratio of 0.63% and management fee of 0.6%. DBMYX 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. With yearly returns of 11.71% 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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