Are You Invested In These 3 Mutual Fund Misfires? - October 08, 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.
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.
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.
Glenmede International Fund (GTCIX): This fund has an expense ratio of 1% and a management fee of 0.75%. 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. GTCIX 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.
Federated Fund for US Government Security C (FUSCX). Expense ratio: 1.71%. Management fee: 0.75%. Over the last 5 years, this fund has generated annual returns of 1.1%.
Templeton Growth A (TEPLX): This fund has an expense ratio of 1.03% and management fee of 0.68%. TEPLX 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 average return of -0.5% over the last five years, the only thing absolute about this absolute return fund is that it absolutely deserves to be on our "worst offender" list.
3 Top Ranked Mutual Funds
Now that you've seen the worst Zacks Ranked mutual funds, let's have a look at some of the highest ranked funds with the lowest fees.
Vanguard US Growth Investor (VWUSX): Expense ratio: 0.38%. Management fee: 0.36%. VWUSX 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. This fund has achieved five-year annual returns of an astounding 13.37%.
Parnassus Core Equity Fund (PRBLX) has an expense ratio of 0.87% and management fee of 0.58%. PRBLX is a Large Cap Value mutual fund, which invests in stocks with a market cap of $10 billion of more, but whose share prices do not reflect their intrinsic value. Thanks to yearly returns of 10.18% over the last five years, PRBLX is an effectively diversified fund with a long reputation of solidly positive performance.
Jensen Quality Growth Fund J (JENSX) has an expense ratio of 0.86% and management fee of 0.49%. JENSX is a Large Cap Blend fund, targeting companies with market caps of over $10 billion. These funds offer investors a stability, and are perfect for people with a "buy and hold" mindset. With yearly returns of 11.68% over the last five years, this fund is well-diversified with a long reputation of salutary performance.
So, there you have it - if your advisor has you invested in any of our "Mutual Fund Misfires of the Market," there is a good probability that they are either asleep at the wheel, incompetent, or (most likely) lining their pockets with high fee commissions at your financial expense.
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