3 Mutual Fund Misfires to Avoid - October 23, 2019
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.
Hartford Inflation Plus C (HIPCX): Expense ratio: 1.6%. Management fee: 0.5%. After expenses, the 5 year return is 0.88%, meaning your fees are far higher than the fund's returns.
Dreyfus Emerging Markets I (DRPEX): 1.75% expense ratio, 1.25% management fee. DRPEX is a Non US - Equity option, focusing their investments acoss emerging and developed markets, and can often extend across cap levels too. This fund has an annual returns of 0.14% over the last five years. Another fund guilty of having investors pay more in fees than returns.
Eaton Vance Short Duration Government Income C (ECLDX) - 1.41% expense ratio, 0.5% management fee. This fund has yielded yearly returns of 0.9% 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.
MFS Growth Fund I (MFEIX): Expense ratio: 0.66%. Management fee: 0.55%. MFEIX is an All Cap Growth mutual fund. In order to increase diversification, these funds have holdings across small, medium, and large-cap levels. This fund has achieved five-year annual returns of an astounding 14.5%.
JPMorgan Intrepid Growth I (JPGSX) has an expense ratio of 0.59% and management fee of 0.5%. JPGSX 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 11.23% over the last five years, JPGSX is an effectively diversified fund with a long reputation of solidly positive performance.
Principal Mid Cap Growth III R5 (PPQPX): Expense ratio: 1.17%. Management fee: 0.98%. PPQPX is a Mid Cap Growth mutual fund. Mid Cap Growth funds pick stocks--usually companies with a market cap between $2 billion and $10 billion--that demonstrate extensive growth opportunities for investors compared to their peers. PPQPX has produced a 10.23% 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.
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