Avoid These 3 Mutual Fund Misfires - 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.

Leader Total Return C (LCCTX): This fund has an expense ratio of 2.96% and a management fee of 0.75%. Without even doing any in-depth analysis, just the fact that you are paying more in fees than you're earning in returns is reason enough not to invest. LCCTX 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. The fund has lagged performance-wise, so perhaps a simpler index future investing strategy might be more effective.

Hartford Global Real Asset R3 (HRLRX). Expense ratio: 1.5%. Management fee: 0.75%. Over the last 5 years, this fund has generated annual returns of 1.43%.

MainGate MLP Fund A (AMLPX): Expense ratio: 1.7%. Management fee: 1.25%. AMLPX is a Sector - Energy fund, which are comprised of various changing and hugely important industries throughout the massive global energy sector. With annual returns of just -8.65%, it's no surprise this fund has received Zacks' "Strong Sell" ranking.

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.

MassMutual Select Equity Opportunities I (MFVZX) is a fund that has an expense ratio of 0.74%, and a management fee of 0.69%. MFVZX 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 yearly returns of 10.84% over the last five years, this fund clearly wins.

Eaton (NYSE:ETN) Vance Focused Value Opportunity I (EIFVX): Expense ratio: 0.8%. Management fee: 0.75%. EIFVX is a part of the Large Cap Value category, and invests in equities with a market capitalization of $10 billion or more, but whose share prices do not reflect their intrinsic value. EIFVX has managed to produce a robust 10.14% over the last five years.

MSIF Global Quality Portfolio A (MGQAX): Expense ratio: 1.24%. Management fee: 0.7%. MGQAX 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. MGQAX has produced a 10.47% over the last five years.

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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