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.
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.
Catalyst/SMH Total Return Income A (TRIFX): 1.56% expense ratio and 1% management fee. TRIFX is an Allocation Balanced mutual fund. Allocation Balanced funds look to invest across asset types, like stocks, bonds, and cash, and including precious metals or commodities is not unusual; these funds are mostly categorized by their respective asset allocation. With a five year after-expenses return of -1.54%, you're mostly paying more in fees than returns.
SA Emerging Markets Value Fund (SAEMX): 1.35% expense ratio, 0.92%. SAEMX 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. This fund has yearly returns of 0.13% over the most recent five years. Another fund liable of having investors pay more in charges than what they receive in return.
Auer Growth Fund (AUERX): Expense ratio: 2.31%. Management fee: 1.5%. AUERX is a Mid Cap Blend mutual fund. These funds usually seek a stock portfolio of various size and style, which allows for diversification when the focus is on companies with a market cap in the range of $2 billion to $10 billion. With annual returns of just -3.5%, it's no surprise this fund has received Zacks' "Strong Sell" ranking.
3 Top Ranked Mutual Funds
Now that you've seen the worst Zacks Ranked mutual funds, let's have a look at some of the highest ranked funds with the lowest fees.
JPMorgan (NYSE:JPM) Intrepid Growth Fund R2 (JIGZX) is a fund that has an expense ratio of 1.09%, and a management fee of 0.5%. JIGZX 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 yearly returns of 11.5% over the last five years, this fund clearly wins.
ClearBridge Small Cap Growth IS (LMOIX) has an expense ratio of 0.78% and management fee of 0.75%. LMOIX is one of many Small Cap Growth mutual funds; these funds tend to create their portfolios around stocks with market capitalization of less than $2 billion. With annual returns of 11.1% over the last five years, this is a well-diversified fund with a long track record of success.
Dreyfus/Boston Small/Mid-Cap Growth A (DBMAX) has an expense ratio of 0.98% and management fee of 0.6%. DBMAX is a Small Cap Blend mutual fund, allowing investors a way to diversify their funds among various types of small-cap stocks. With yearly returns of 10.92% 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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Original post
Zacks Investment Research