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.
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.
AMG SouthernSun Small Cap I (SSSIX): 1% expense ratio and 0.75% management fee. SSSIX is a Small Cap Value fund, and these funds are known for investing in companies with market caps under $2 billion. With a five year after-costs return of 0.74%, you're for the most part paying more in charges than returns.
AQR Multi Strategy Alternative I (ASAIX). Expense ratio: 1.96%. Management fee: 0.75%. Over the last 5 years, this fund has generated annual returns of -1.14%.
Oppenheimer SteelPath MLP Alpha A (MLPAX) - 1.54% expense ratio, 1.1% management fee. This fund has yielded yearly returns of -8.38% 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.
Lord Abbett Developing Growth I (LADYX) is a fund that has an expense ratio of 0.69%, and a management fee of 0.51%. LADYX is a Small Cap Growth mutual fund and tends to feature small companies in up-and-coming industries and markets. With yearly returns of 10.13% over the last five years, this fund clearly wins.
T. Rowe Price Science & Technology Adviser (PASTX) has an expense ratio of 1.06% and management fee of 0.64%. PASTX is part of the Sector - Tech mutual fund category that invests in technology and lets investors own a stake in a notoriously volatile sector, but with a much more diversified approach. With annual returns of 15.53% over the last five years, this is a well-diversified fund with a long track record of success.
MFS Global Growth Fund I (MWOIX): Expense ratio: 1.12%. Management fee: 0.9%. MWOIX 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. MWOIX has produced a 10.93% over the last five years.
Along these lines, there you have it - if your financial guide has you put your money into any of our "Mutual Fund Misfires of the Market," there is a strong likelihood that they are either dormant at the worst possible time, inept, or (in all probability) filling their pockets with high fee commissions at the cost of your financial objectives.
Do You Know the Top 9 Retirement Investing Mistakes?
Whether you're planning to retire early or not, don't let investing mistakes derail your plans.
If you have $500,000 or more to invest and want to learn more, click the link to download our free report, 9 Retirement Mistakes that will Ruin Your Retirement.
This report will help you steer clear of the most common mistakes, like trying to time the market, lack of diversification in your portfolio, and many more. Get Your FREE Guide Now
Get Your Free (LADYX): Fund Analysis Report
Get Your Free (MLPAX): Fund Analysis Report
Get Your Free (ASAIX): Fund Analysis Report
Get Your Free (SSSIX): Fund Analysis Report
Get Your Free (MWOIX): Fund Analysis Report
Get Your Free (PASTX): Fund Analysis Report
To read this article on Zacks.com click here.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.