Does Your Retirement Portfolio Hold These 3 Mutual Fund Misfires? - March 13, 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.

AIG (NYSE:AIG) Commodity Strategy C (SUNCX): This fund has an expense ratio of 2.37% and a management fee of 1%. 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. SUNCX is a part of the Allocation Balanced fund category; these funds like to invest in a variety of asset types, finding a balance between stocks, bonds, cash, and sometimes even precious metals and commodities; they are mostly categorized by their respective asset allocation. The fund has lagged performance-wise, so perhaps a simpler index future investing strategy might be more effective.

Catalyst MLP & Infrastructure I (MLXIX): MLXIX is a Sector - Energy mutual fund, which encompasses a wide range of vastly changing and vitally important industries throughout this massive global sector. MLXIX offers an expense ratio of 1.43% and annual returns of -6.68% 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.

Leader Total Return Institutional (LCTIX): This fund has an expense ratio of 1.88% and management fee of 0.75%. LCTIX is an Investment Grade Bond - Intermediate fund, which targets bonds that mature in more than three years but less than 15 years, and are a middle of the curve option for investors. With an annual average return of 1.74% 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

Now that you've seen the worst Zacks Ranked mutual funds, let's have a look at some of the highest ranked funds with the lowest fees.

Janus Henderson Global Technology S (JATSX) is a winner, with an expense ratio of just 1.22% and a five-year annualized return track record of 19.9%.

Fidelity Advisor Series Equity Gr (FMFMX) has an expense ratio of 0.01% and management fee of 0%. FMFMX is a Large Cap Growth option; these mutual funds purchase stakes in numerous large U.S. companies that are expected to develop and grow at a faster rate than other large-cap stocks. Thanks to yearly returns of 14.8% over the last five years, FMFMX is an effectively diversified fund with a long reputation of solidly positive performance.

Hartford Stock HLS IA (HSTAX): Expense ratio: 0.52%. Management fee: 0.48%. HSTAX is classified as a Large Cap Blend fund. More often than not, Large Cap Blend mutual funds invest in companies with a market cap of over $10 billion. Buying stakes in bigger companies offer these funds more stability, and are well-suited for investors with a "buy and hold" mindset. HSTAX has produced a 11.63% over the last five years.

Bottom Line

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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Zacks Investment Research