Mutual Fund Misfires Of The Market - March 19, 2020

If your financial advisor made you buy any of these "Mutual Fund Misfires of the Market" with high expenses and low returns, you need to reassess your advisor.

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.

CMG Mauldin Solutions A (GEFAX): This fund has an expense ratio of 1.73% and a management fee of 1.05%. 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. GEFAX is a Global - Equity mutual fund, which invests their assets in large markets, leveraging the global economy. The fund has lagged performance-wise, so perhaps a simpler index future investing strategy might be more effective.

Brandes International Small Cap Equity A (BISAX). Expense ratio: 1.35%. Management fee: 1.05%. Over the last 5 years, this fund has generated annual returns of 0.8%.

MainGate MLP Fund I (IMLPX) - 1.44% expense ratio, 1.25% management fee. This fund has yielded yearly returns of -7.4% 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.

T. Rowe Price Financial Services (PRISX) is a winner, with an expense ratio of just 0.83% and a five-year annualized return track record of 10.07%.

BlackRock (NYSE:BLK) Mid Cap Growth Equity Service Class (CMGSX): Expense ratio: 1.05%. Management fee: 0.67%. CMGSX 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. CMGSX has managed to produce a robust 15.47% over the last five years.

AB Small Cap Growth Adviser (QUAYX) has an expense ratio of 0.91% and management fee of 0.75%. QUAYX is a Small Cap Growth mutual fund and tends to feature small companies in up-and-coming industries and markets. With annual returns of 14.02% 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