3 Mutual Fund Misfires To Avoid In Your Retirement Portfolio - March 10, 2020

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.

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.

Leader Total Return Investor (LCTRX): 2.42% expense ratio and 0.75% management fee. LCTRX is part of the Investment Grade Bond - Intermediate fund group. These mutual funds focus on the middle part of the curve, generally with bonds that usually mature in more than three years but less than 15 years. With a five year after-expenses return of 1.18%, you're mostly paying more in fees than returns.

Templeton International Bond Fund C (FCNBX): FCNBX is an International Bond - Developed fund, and these funds funds focus on fixed income securities from developed nations apart from the United States. This usually results in countries like Japan, Germany, the UK, France, and Australia dominating the list of top holdings. FCNBX offers an expense ratio of 1.39% and annual returns of 0.97% over the last five years. Even if this fund can be positioned as a hedge during the recent bull-market, paying more in fees than returns over the long-term should never be an acceptable result.

Goldman Sachs (NYSE:GS) Local Emerging Markets Debt C (GCMDX) - 1.97% expense ratio, 0.8% management fee. This fund has yielded yearly returns of 0.22% in the course of the last five years. Too bad!

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.

MSIF Global Franchise A (MSFBX): 1.17% expense ratio and 0.76% management fee. MSFBX 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 an annual return of 11.09% over the last five years, this fund is a winner.

MFS Mid-Cap Growth Fund R4 (OTCJX) has an expense ratio of 0.83% and management fee of 0.69%. OTCJX is a Mid Cap Growth mutual fund. These funds aim to target companies with a market capitalization between $2 billion and $10 billion that are also expected to exhibit more extensive growth opportunities for investors than their peers. With annual returns of 13.96% over the last five years, this is a well-diversified fund with a long track record of success.

AB Small Cap Growth I (QUAIX) is an attractive fund with a five-year annualized return of 14.05% and an expense ratio of just 0.9%. QUAIX is one of many Small Cap Growth mutual funds; these funds tend to create their portfolios around stocks with market capitalization of less than $2 billion.

Bottom Line

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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Zacks Investment Research