3 Mutual Fund Misfires To Avoid In Your Retirement Portfolio - March 06, 2020

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.

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.

Templeton Frontier Markets Adviser (FFRZX): 1.71% expense ratio and 1.4% management fee. FFRZX is a Non US - Equity option, focusing their investments acoss emerging and developed markets, and can often extend across cap levels too. With a five year after-expenses return of -3.05%, you're mostly paying more in fees than 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 0.63% over the most recent five years. Another fund liable of having investors pay more in charges than what they receive in return.

AQR Multi Strategy Alternative I (ASAIX) - 1.96% expense ratio, 1.75% management fee. ASAIX is classified as an Allocation Balanced fund, which seeks to invest in a balance of asset types, like stocks, bonds, and cash, and including precious metals or commodities is not unusual. ASAIX has generated annual returns of -2.66% over the last five years. Ouch!

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.

Capital Group US Equity (CUSEX): 0.42% expense ratio and 0.43% management fee. CUSEX 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. With an annual return of 11.63% over the last five years, this fund is a winner.

MSIF Global Opportunity Portfolio A (MGGPX): Expense ratio: 1.23%. Management fee: 0.74%. MGGPX 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. MGGPX has managed to produce a robust 16.39% over the last five years.

JPMorgan (NYSE:JPM) Tax Aware Equity C (JPECX) has an expense ratio of 1.44% and management fee of 0.35%. JPECX 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 10.44% over the last five years, this fund is a well-diversified fund with a long track record of success.

Bottom Line

So, there you have it - if your advisor has you invested in any of our "Mutual Fund Misfires of the Market," there is a good probability that they are either asleep at the wheel, incompetent, or (most likely) lining their pockets with high fee commissions at your financial expense.

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