Avoid These 3 Mutual Fund Misfires - November 07, 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 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.
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.
Victory RS Global Natural Resources A (RSNRX): 1.48% expense ratio and 1% management fee. RSNRX is classified as a Sector - Energy mutual fund. Throughout the massive global energy sector, these funds hold a wide range of quickly changing and vitally important industries. With a five year after-expenses return of -24.77%, you're mostly paying more in fees than returns.
Invesco International Small Company C (IEGCX): 2.33% expense ratio, 0.93% management fee. IEGCX 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. This fund has an annual returns of 0.77% over the last five years. Another fund guilty of having investors pay more in fees than returns.
Dreyfus GNMA C (GPNCX) - 1.92% expense ratio, 0.5% management fee. This fund has yielded yearly returns of 1.11% 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.
Hartford Core Equity C (HGICX): 1.48% expense ratio and 0.35% management fee. HGICX is classified as a Large Cap Blend fund. More often than not, Large Cap Blend mutual funds invest in companies with a market cap of over $10 billion. Buying stakes in bigger companies offer these funds more stability, and are well-suited for investors with a "buy and hold" mindset. With an annual return of 11.15% over the last five years, this fund is a winner.
MFS Mass Investors Growth Stock R5 (MIGNX): Expense ratio: 0.38%. Management fee: 0.33%. MIGNX 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. MIGNX has managed to produce a robust 14.01% over the last five years.
Davis Real Estate Y (DREYX) is an attractive fund with a five-year annualized return of 10.78% and an expense ratio of just 0.73%. DREYX is categorized as a Sector - Real Estate mutual fund, which typically invests in various real estate investment trusts (REIT) due to their taxation rules.
We hope that your investment advisor (if you use one) has you invested in one or all of the top-ranked mutual funds we've reviewed. But if that is not the case, and your advisor has you invested in any of the funds on our "worst offender" list, it might be time to have a conversation or reconsider this vitally important relationship.
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