If your advisor has you invested in any of these "Mutual Fund Misfires of the Market" with high fees and low returns, you need to rethink your advisor.
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.
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.
Templeton Frontier Markets A (TFMAX): 1.96% expense ratio and 1.4% management fee. TFMAX is a Non US - Equity fund. Many of these funds like to allocate across emerging and developed markets, and will often focus on all cap levels. With a five year after-costs return of -4.3%, you're for the most part paying more in charges than returns.
Sierra Core Retirement C (SIRCX): 2.48% expense ratio, 1.25% management fee. SIRCX is an Allocation Balanced mutual fund. Allocation Balanced funds look to invest across asset types, like stocks, bonds, and cash, and including precious metals or commodities is not unusual; these funds are mostly categorized by their respective asset allocation. This fund has an annual returns of 1.57% over the last five years. Another fund guilty of having investors pay more in fees than returns.
Bread & Butter Fund (BABFX) - 2% expense ratio, 1% management fee. This fund has yielded yearly returns of 0.43% in the course of the last five years. Too bad!
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.
Harbor Global Leaders Investor (HGGIX): 1.27% expense ratio and 0.75% management fee. HGGIX 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. With an annual return of 11.87% over the last five years, this fund is a winner.
BMO Large-Cap Growth Fund I (MLCIX) has an expense ratio of 0.54% and management fee of 0.35%. MLCIX 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 annual returns of 13.4% over the last five years, this is a well-diversified fund with a long track record of success.
Fidelity Strategic Advisers Core Fund (FCSAX) has an expense ratio of 0.2% and management fee of 0.45%. FCSAX is a Large Cap Blend fund, targeting companies with market caps of over $10 billion. These funds offer investors a stability, and are perfect for people with a "buy and hold" mindset. With annual returns of 11.06% over the last five years, this fund is a well-diversified fund with a long track record of success.
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