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.
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.
Eaton (NYSE:ETN) Vance Government Obligation R (ERGOX): 1.45% expense ratio and 0.65% management fee. ERGOX is a Government Mortgage - Short mutual fund; these funds focus on the mortgage-backed securities (MBS) market and specifially, securities that have less than three years until maturity. With a five year after-expenses return of 0.73%, you're mostly paying more in fees than returns.
Aberdeen International Equity C (GIGCX): 2.13% expense ratio, 0.8%. GIGCX 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 -0.59% over the most recent five years. Another fund liable of having investors pay more in charges than what they receive in return.
Highland Long/Short Equity A (HEOAX) - 2.88% expense ratio, 2.25% management fee. HEOAX is a Long Short - Equity option. These funds' investment strategy consists of minimizing overall market exposure, while at the same time taking long positions in equities that are expected to appreciate and short positions in equities that are projected to decline. HEOAX has generated annual returns of 0.69% over the last five years. Ouch!
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.
VY T. Rower Price Diversified Mid Cap Growth Advisor (IAXAX): Expense ratio: 1.28%. Management fee: 0.74%. IAXAX is a Mid Cap Blend mutual fund that typically features a portfolio filled with stocks of various sizes and styles; it allows for a diversification strategy focusing on companies with market caps between $2 billion and $10 billion. This fund has achieved five-year annual returns of an astounding 11.81%.
Janus Henderson Research Institutional (JAGRX) has an expense ratio of 0.58% and management fee of 0.48%. JAGRX 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. Thanks to yearly returns of 11.58% over the last five years, JAGRX is an effectively diversified fund with a long reputation of solidly positive performance.
Oppenheimer International Small -Mid Company Y (OSMYX) is an attractive fund with a five-year annualized return of 10.91% and an expense ratio of just 1.13%. OSMYX is a Non US - Equity option, focusing their investments acoss emerging and developed markets, and can often extend across cap levels too.
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>>
Get Your Free (IAXAX): Fund Analysis Report
Get Your Free (HEOAX): Fund Analysis Report
Get Your Free (GIGCX): Fund Analysis Report
Get Your Free (ERGOX): Fund Analysis Report
Get Your Free (OSMYX): Fund Analysis Report
Get Your Free (JAGRX): Fund Analysis Report
Original post
Zacks Investment Research