Does Your Retirement Portfolio Hold These 3 Mutual Fund Misfires? - November 12, 2019
If your advisor has you invested in any of these "Mutual Fund Misfires of the Market" with high fees and low returns, you need to rethink your advisor.
How can you tell a good mutual fund from a bad one? It's pretty basic: If the fund has high fees and performs poorly, it's not good. Of course, there's a range - but when a mutual fund earns a Zacks Rank of #5 (Strong Sell) that means it's among the worst of roughly 19,000 funds we rate each 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.
ProFunds Biotech Ultra Sector Investor (BIPIX): This fund has an expense ratio of 1.45% 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. BIPIX is part of the Sector - Health category, offering investors a focus on the healthcare industry, one of the largest sectors in the American economy. The fund has lagged performance-wise, so perhaps a simpler index future investing strategy might be more effective.
Aberdeen International Equity A (GIGAX): 1.53% expense ratio, 0.8% management fee. GIGAX 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 -1.06% over the last five years. Another fund guilty of having investors pay more in fees than returns.
Janus Henderson Europe Focus A (HFEAX) - 1.31% expense ratio, 0.93% management fee. HFEAX is a Europe - Equity mutual fund option, and these funds tend to invest their assets in stocks across the European continent, including countries such as Great Britain, Germany, France, Italy, and Spain. HFEAX has generated annual returns of -3.56% over the last five years. Ouch!
3 Top Ranked Mutual Funds
There you have it: some prime examples of truly bad mutual funds. In contrast, here are a few funds that have achieved high Zacks Ranks and have low fees.
Baird Midcap Investor (BMDSX) is a winner, with an expense ratio of just 1.06% and a five-year annualized return track record of 10.79%.
City Natural Rochdale US Core Equity & Income Service Class (CNRVX) is a stand out fund. CNRVX 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. With five-year annualized performance of 11.55% and expense ratio of 0.78%, this diversified fund is an attractive buy with a strong history of performance.
MFS Growth Fund R2 (MEGRX) is an attractive fund with a five-year annualized return of 13.93% and an expense ratio of just 1.16%. MEGRX is an All Cap Growth mutual fund investing in a wide variety of equities, no matter the size of the company and as long as the firm exhibits growth characteristics.
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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