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.
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.
Goldman Sachs (NYSE:GS) Dynamic Allocation A (GDAFX): 1.16% expense ratio and 0.79% management fee. GDAFX 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. With a five year after-expenses return of -0.77%, you're mostly paying more in fees than returns.
American Century Short Term Government R (TWARX): 1.06% expense ratio, 0.54% management fee. TWARX is part of the Government Bond - Short fund category. Often seen as risk-free assets, these funds hold securities issued by the U.S. federal government and they focus on the short end of the curve. This fund has an annual returns of 0.45% over the last five years. Another fund guilty of having investors pay more in fees than returns.
Eaton (NYSE:ETN) Vance Short Term Real Return C (ECRRX) - 1.7% expense ratio, 0.33% management fee. This fund has yielded yearly returns of 1.44% 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.
Hartford Stock HLS IB (HIBSX) is a winner, with an expense ratio of just 0.77% and a five-year annualized return track record of 11.35%.
General Electric (NYSE:GE) RSP Mutual Fund (GESSX) has an expense ratio of 0.14% and management fee of 0.1%. GESSX is a part of the Large Cap Growth mutual fund category, which invest in many large U.S. companies that are expected to grow much faster compared to other large-cap stocks. Thanks to yearly returns of 10.75% over the last five years, GESSX is an effectively diversified fund with a long reputation of solidly positive performance.
MSIF International Advantage I (MFAIX): Expense ratio: 0.98%. Management fee: 0.8%. MFAIX 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. MFAIX has produced a 15.07% over the last five years.
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.
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