Avoid These 3 Mutual Fund Misfires - December 02, 2019
You may need to start looking for a new financial advisor if your current one has put any of these high-fee, low-return "Mutual Fund Misfires of the Market" into your portfolio.
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.
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.
Ivy Cundill Global Value R (IYCUX): This fund has an expense ratio of 1.69% and a management fee of 1%. 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. IYCUX is a Global - Equity mutual fund investing in bigger markets like the U.S., Europe, and Japan; these kinds of funds aren't limited by geography. The fund has lagged performance-wise, so perhaps a simpler index future investing strategy might be more effective.
Touchstone Ultra Short Duration Fixed Income A (TSDAX): 0.69% expense ratio, 0.25% management fee. TSDAX is part of the Government Bond - Short fund category. Often seen as risk-free assets, these funds hold securities issued by the U.S. federal government and they focus on the short end of the curve. This fund has an annual returns of -0.65% over the last five years. Another fund guilty of having investors pay more in fees than returns.
Sierra Core Retirement C (SIRCX) - 2.48% expense ratio, 1.25% management fee. This fund has yielded yearly returns of 1.31% in the course of the last five years. Too bad!
3 Top Ranked Mutual Funds
Since you've seen the most noticeably lowest Zacks Ranked mutual funds, how about we take a look at some of the top ranked mutual funds with the least fees.
Janus Henderson Enterprise N (JDMNX): 0.66% expense ratio and 0.64% management fee. JDMNX is a Mid Cap Growth mutual fund. These funds aim to target companies with a market capitalization between $2 billion and $10 billion that are also expected to exhibit more extensive growth opportunities for investors than their peers. With an annual return of 14.98% over the last five years, this fund is a winner.
AQR Large Cap Defensive Style N (AUENX) has an expense ratio of 0.65% and management fee of 0.25%. AUENX is part of the Large Cap Blend section, and these mutual funds most often invest in firms with a market capitalization of $10 billion or more. By investing in bigger companies, these funds offer more stability, and are often well-suited for investors with a "buy and hold" mindset. With annual returns of 13.62% over the last five years, this is a well-diversified fund with a long track record of success.
JPMorgan Small Cap Growth Fund R6 (JGSMX) has an expense ratio of 0.74% and management fee of 0.65%. JGSMX is a Small Cap Growth mutual fund building their portfolio around stocks with market caps under $2 billion and large growth opportunities. With yearly returns of 14.09% over the last five years, this fund is well-diversified with a long reputation of salutary performance.
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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