Does your current advisor have your money invested in these "Mutual Fund Misfires of the Market" that charge high fees for low returns? If so, it may be time for a new advisor.
High fees coupled with poor results: It's a straightforward equation for an awful mutual fund. Some are more regrettable than others - and some are bad to the point that they have got a "Strong Sell" from our Zacks Rank, the lowest positioning of the almost 19,000 mutual funds we rank every 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.
Fidelity Advisor Strategy Real Return C (FCSRX): Expense ratio: 1.85%. Management fee: 0.56%. After expenses, the 5 year return is 0.53%, meaning your fees are far higher than the fund's returns.
AIG (NYSE:AIG) US Government Securities C (NASBX): 1.64% expense ratio, 0.65% management fee. NASBX is categorized as a Government Bond - Long option, which holds securities issued by the U.S. federal government; these funds focus on the long end of the curve, which can result in higher yields but greater sensitivity to interest rate fluctuations. This fund has an annual returns of 0.55% over the last five years. Another fund guilty of having investors pay more in fees than returns.
AB International Value Adviser (ABIYX): Expense ratio: 1.32%. Management fee: 0.75%. ABIYX is a Non US - Equity option, focusing their investments acoss emerging and developed markets, and can often extend across cap levels too. With annual returns of just 0.37%, it's no surprise this fund has received Zacks' "Strong Sell" ranking.
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.
Harbor Mid Cap Growth Admiral (HRMGX) is a winner, with an expense ratio of just 1.14% and a five-year annualized return track record of 11.34%.
Direxion Monthly S&P 500 Bull 2X Investor (DXSLX): Expense ratio: 1.35%. Management fee: 0.75%. DXSLX 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. DXSLX has managed to produce a robust 16.83% over the last five years.
VY T. Rowe Price Cap Appreciation S2 (ITCTX) has an expense ratio of 1.04% and management fee of 0.64%. ITCTX is categorized as an All Cap Value fund, and like the name suggests, invests across the cap spectrum in small-cap, mid-cap, and large-cap companies. With annual returns of 10.03% over the last five years, this fund is a well-diversified fund with a long track record of success.
Bottom Line
These examples underscore the huge range in quality of mutual funds - from the really bad to the astonishingly good. There is no reason for your advisor to keep your money in any fund that charges more than you get in return (unless they're getting something out of it, like a high commission).
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>>
Get Your Free (DXSLX): Fund Analysis Report
Get Your Free (ABIYX): Fund Analysis Report
Get Your Free (NASBX): Fund Analysis Report
Get Your Free (FCSRX): Fund Analysis Report
Get Your Free (ITCTX): Fund Analysis Report
Get Your Free (HRMGX): Fund Analysis Report
Original post
Zacks Investment Research