Does Your Retirement Portfolio Hold These 3 Mutual Fund Misfires? - November 18, 2019
If your financial advisor made you buy any of these "Mutual Fund Misfires of the Market" with high expenses and low returns, you need to reassess your 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.
Hartford Global Real Asset R5 (HRLTX): 0.95% expense ratio and 0.85% management fee. HRLTX 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 a five year after-costs return of -1.56%, you're for the most part paying more in charges than returns.
Oppenheimer SteelPath MLP Alpha A (MLPAX). Expense ratio: 1.54%. Management fee: 0.85%. Over the last 5 years, this fund has generated annual returns of -8.38%.
Janus Henderson Diversified Alternatives T (JDATX): This fund has an expense ratio of 1.29% and management fee of 1%. JDATX is a part of the Allocation Balanced fund category; these funds like to invest in a variety of asset types, finding a balance between stocks, bonds, cash, and sometimes even precious metals and commodities; they are mostly categorized by their respective asset allocation. With an annual average return of 1% 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
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.
Victory Sycamore Established Value R6 (VEVRX): Expense ratio: 0.58%. Management fee: 0.45%. VEVRX is categorized as an All Cap Value fund, and like the name suggests, invests across the cap spectrum in small-cap, mid-cap, and large-cap companies. This fund has achieved five-year annual returns of an astounding 10.57%.
AQR Large Cap Defensive Style R6 (QUERX) is a stand out fund. QUERX 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 five-year annualized performance of 14.03% and expense ratio of 0.3%, this diversified fund is an attractive buy with a strong history of performance.
PNC Multi-Factor Large Cap Growth I (PEWIX) has an expense ratio of 0.65% and management fee of 0.55%. PEWIX is a part of the Large Cap Growth mutual fund category, which invest in many large U.S. companies that are expected to grow much faster compared to other large-cap stocks. With yearly returns of 11.37% 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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