Does Your Retirement Portfolio Hold These 3 Mutual Fund Misfires? - October 18, 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.
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.
AB Allocation Market Real Return 1 (AMTOX): Expense ratio: 1.09%. Management fee: 0.75%. After expenses, the 5 year return is -2.52%, meaning your fees are far higher than the fund's returns.
Hartford Global Real Asset A (HRLAX): 1.25% expense ratio, 0.85%. HRLAX 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. This fund has yearly returns of -2.89% over the most recent five years. Another fund liable of having investors pay more in charges than what they receive in return.
SA Emerging Markets Value Fund (SAEMX): This fund has an expense ratio of 1.35% and management fee of 0.92%. SAEMX is a Non US - Equity option, focusing their investments acoss emerging and developed markets, and can often extend across cap levels too. With an annual average return of -0.27% 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
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.
USAA Science & Technology Fund Adviser (USTCX) is a fund that has an expense ratio of 1.29%, and a management fee of 0.72%. USTCX is a Sector - Tech mutual fund, allowing investors to own a stake in a notoriously volatile sector with a much more diversified approach. With yearly returns of 13.38% over the last five years, this fund clearly wins.
Janus Henderson Enterprise T (JAENX) is a stand out fund. JAENX is a Mid Cap Growth mutual fund. These mutual funds choose companies with a stock market valuation between $2 billion and $10 billion. With five-year annualized performance of 14.7% and expense ratio of 0.91%, this diversified fund is an attractive buy with a strong history of performance.
Principal Capital Appreciation R5 (PCAQX) has an expense ratio of 0.75% and management fee of 0.47%. PCAQX 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 annual returns of 10.9% over the last five years, this fund is a well-diversified fund with a long track record of success.
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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