Are You Invested In These 3 Mutual Fund Misfires? - March 19, 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.

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.

Alger International Growth C (ALGCX): 2.23% expense ratio and 0.71% management fee. ALGCX 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 2.17%, you're mostly paying more in fees than returns.

AB Unconstrained Bond C (AGCCX): 1.65% expense ratio, 0.5% management fee. AGCCX is a Diversified Bonds investment option; these funds give investors exposure to a variety of fixed income types that span across different issuers, maturities, and credit levels. This fund has an annual returns of -0.25% over the last five years. Another fund guilty of having investors pay more in fees than returns.

Neuberger Berman Absolute Return Multi Manager A (NABAX) - 2.33% expense ratio, 1.96% management fee. This fund has yielded yearly returns of -0.72% 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.

T. Rowe Price QM US Small Cap Growth Equity (PRDSX): 0.79% expense ratio and 0.64% management fee. PRDSX is a Small Cap Growth mutual fund and tends to feature small companies in up-and-coming industries and markets. With an annual return of 11.46% over the last five years, this fund is a winner.

BlackRock (NYSE:BLK) Advantage Large Cap Growth S (CMVSX) has an expense ratio of 0.87% and management fee of 0.57%. CMVSX 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 annual returns of 12.17% over the last five years, this is a well-diversified fund with a long track record of success.

AB Discovery Growth Adviser (CHCYX) has an expense ratio of 0.72% and management fee of 0.61%. CHCYX 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 11.65% over the last five years, this fund is a well-diversified fund with a long track record of success.

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