3 Mutual Fund Misfires To Avoid In Your Retirement Portfolio - September 26, 2019 (Revised)
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.
Western Asset Short Duration High Income C1 SHICX: Expense ratio: 1.41%. Management fee: 0.55%. After expenses, the 5 year return is 1.33%, meaning your fees are far higher than the fund's returns.
AIC McKee International Equity Institutional MKIEX: 1.04% expense ratio, 0.7% management fee. MKIEX 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. With annual returns of 0.7% over the last five years. Another fund guilty of having investors pay more in fees than returns.
Franklin CT Tax-Free Income C FCTIX: This fund has an expense ratio of 1.32% and management fee of 0.55%. FCTIX is a Muni - Bonds mutual fund, which focus their investments on debt securities issued by state and local governments; these are typically used to pay for the construction of infrastructure, the operation of public schools, and other municipal functions. With an annual average return of 1.74% over the last five years, it's no surprise this fund has received Zacks' "Strong Sell" ranking.
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.
Parnassus Core Equity Fund I PRILX is a winner, with expenses ratio of just 1.21% and a five-year annualized return track record of 10.39%
JPMorgan Large Cap Growth R6 JLGMX has an expense ratio of 0.43% and management fee of 0.5%. JLGMX is a Large Cap Growth mutual fund, and these funds invest in many large U.S. firms that are projected to grow at a faster rate than their large-cap peers. With annual returns of 15.51% over the last five years, this is a well-diversified fund with a long track record of success.
AB Discovery Growth Adviser CHCYX has an expense ratio of 0.71% and management fee of 0.62%. CHCYX is a Mid Cap Blend mutual fund. These funds usually seek a stock portfolio of various size and style, which allows for diversification when the focus is on companies with a market cap in the range of $2 billion to $10 billion. With yearly returns of 11.45% over the last five years, this fund is well-diversified with a long reputation of salutary performance.
These examples underscore the huge range in quality of mutual funds - from the really bad to the astonishingly good. There is no reason for your advisor to keep your money in any fund that charges more than you get in return (unless they're getting something out of it, like a high commission).
If you have concerns or any doubts about your investment advisor, read our just-released report:
(NOTE: We are re-issuing this article to correct an inaccuracy. The original article, published Tuesday, September 26, 2019, should no longer be relied upon.)
Click to get this free report
Get Your Free (JLGMX): Fund Analysis Report
Get Your Free (SHICX): Fund Analysis Report
Get Your Free (PRILX): Fund Analysis Report
Get Your Free (MKIEX): Fund Analysis Report
Get Your Free (CHCYX): Fund Analysis Report
Get Your Free (FCTIX): Fund Analysis Report
To read this article on Zacks.com click here.
Zacks Investment Research
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.