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.
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.
MainStay ICAP (LON:NXGN) International A (ICEVX): This fund has an expense ratio of 1.19% and a management fee of 0.8%. 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. ICEVX is a part of the Non US - Equity fund category, many of which will focus across all cap levels, and will typically allocate their investments between emerging and developed markets. The fund has lagged performance-wise, so perhaps a simpler index future investing strategy might be more effective.
Goldman Sachs (NYSE:GS) Local Emerging Markets Debt I (GIMDX). Expense ratio: 0.91%. Management fee: 0.8%. Over the last 5 years, this fund has generated annual returns of -0.99%.
Invesco Gold & Precious Metals Y (IGDYX) - 1.22% expense ratio, 0.75% management fee. This fund has yielded yearly returns of 0.51% in the course of the last five years. Too bad!
3 Top Ranked Mutual Funds
There you have it: some prime examples of truly bad mutual funds. In contrast, here are a few funds that have achieved high Zacks Ranks and have low fees.
MFS Global Growth R3 (MWOHX): 1.38% expense ratio and 0.9% management fee. MWOHX is a Global - Equity mutual fund. These funds invest in large markets like the U.S., Europe, and Japan, and operate with very few geographical limitations. With an annual return of 10.65% over the last five years, this fund is a winner.
MassMutual Select Small Cap Growth Equity Service Class (MSCYX) has an expense ratio of 1.06% and management fee of 0.8%. MSCYX is a Small Cap Growth mutual fund and tends to feature small companies in up-and-coming industries and markets. With annual returns of 10.44% over the last five years, this is a well-diversified fund with a long track record of success.
Principal Large Cap Growth I Institutional (PLGIX) has an expense ratio of 0.68% and management fee of 0.6%. PLGIX 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 14.34% over the last five years, this fund is well-diversified with a long reputation of salutary performance.
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