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.
High fees plus poor performance: It's a pretty simple formula for a bad mutual fund. Some are worse than others - and some are so bad that they have earned a "Strong Sell" on the Zacks Rank, the lowest ranking of the nearly 19,000 mutual funds we rank daily.
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.
America First Income Trends I (AFPIX): 1.59% expense ratio and 1.25% management fee. AFPIX is classified as a Diversified Bonds fund, which offers exposure to a wide variety of fixed income types, stretching across various issuers, credit levels, and maturities. With a five year after-expenses return of -0.69%, you're mostly paying more in fees than returns.
AB Allocation Market Real Return 1 (AMTOX): 1.09% expense ratio, 0.75%. AMTOX is a part of the Allocation Balanced fund category; these funds like to invest in a variety of asset types, finding a balance between stocks, bonds, cash, and sometimes even precious metals and commodities; they are mostly categorized by their respective asset allocation. This fund has yearly returns of -4% over the most recent five years. Another fund liable of having investors pay more in charges than what they receive in return.
Manning & Napier International (EXITX) - 1.1% expense ratio, 0.6% management fee. EXITX 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. EXITX has generated annual returns of 0.06% 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.
MassMutual Select Mid Cap Growth I (MEFZX): Expense ratio: 0.71%. Management fee: 0.69%. MEFZX 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. This fund has achieved five-year annual returns of an astounding 10.71%.
VALIC Company II Socially Responsible Fund (VCSRX) has an expense ratio of 0.56% and management fee of 0.25%. VCSRX 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. Thanks to yearly returns of 10.25% over the last five years, VCSRX is an effectively diversified fund with a long reputation of solidly positive performance.
Motley Fool Independence Institutional (FOIIX) has an expense ratio of 0.95% and management fee of 0.85%. FOIIX is a Global - Equity mutual fund investing in bigger markets like the U.S., Europe, and Japan; these kinds of funds aren't limited by geography. With annual returns of 10.06% 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