Mutual Fund Misfires Of The Market - March 20, 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.

How can you tell a good mutual fund from a bad one? It's pretty basic: If the fund has high fees and performs poorly, it's not good. Of course, there's a range - but when a mutual fund earns a Zacks Rank of #5 (Strong Sell) that means it's among the worst of roughly 19,000 funds we rate each day.

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.

Touchstone Ultra Short Duration Fixed Income A (TSDAX): 0.69% expense ratio and 0.25% management fee. TSDAX is a Government Bond - Short fund, and these funds hold securities issued by the U.S. federal government. This category focuses on the short end of the curve, and are seen as extremely low risk securities from a default perspective. With a five year after-expenses return of -0.59%, you're mostly paying more in fees than returns.

Eaton (NYSE:ETN) Vance Government Obligation C (ECGOX): ECGOX is a Government Mortgage - Short mutual fund; these funds focus on the mortgage-backed securities (MBS) market and specifially, securities that have less than three years until maturity. ECGOX offers an expense ratio of 1.99% and annual returns of 0.2% 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.

Ivy Natural Resources N (INRSX): Expense ratio: 1.03%. Management fee: 0.85%. INRSX is a Sector - Energy mutual fund, which encompasses a wide range of vastly changing and vitally important industries throughout this massive global sector. With annual returns of just -3.15%, it's no surprise this fund has received Zacks' "Strong Sell" ranking.

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.

T. Rowe Price New Horizons (PRNHX) is a fund that has an expense ratio of 0.76%, and a management fee of 0.64%. PRNHX is one of many Small Cap Growth mutual funds; these funds tend to create their portfolios around stocks with market capitalization of less than $2 billion. With yearly returns of 16.24% over the last five years, this fund clearly wins.

Janus Henderson Research N (JRANX): Expense ratio: 0.54%. Management fee: 0.53%. JRANX 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. JRANX has managed to produce a robust 12.36% over the last five years.

US Global Investor Gold & Precious Metals (USERX) is an attractive fund with a five-year annualized return of 15.21% and an expense ratio of just 0.1%. Sector - Precious Metal funds like USERX normally invest in stocks focused on the mining and production of precious metals such as gold, silver, platinum, and palladium.

Bottom Line

So, there you have it - if your advisor has you invested in any of our "Mutual Fund Misfires of the Market," there is a good probability that they are either asleep at the wheel, incompetent, or (most likely) lining their pockets with high fee commissions at your financial expense.

Do You Know the Top 9 Retirement Investing Mistakes?

Whether you're planning to retire early or not, don't let investing mistakes derail your plans.

If you have $500,000 or more to invest and want to learn more, click the link to download our free report, 9 Retirement Mistakes that will Ruin Your Retirement.

This report will help you steer clear of the most common mistakes, like trying to time the market, lack of diversification in your portfolio, and many more. Get Your FREE Guide Now

Get Your Free (JRANX): Fund Analysis Report

Get Your Free (PRNHX): Fund Analysis Report

Get Your Free (INRSX): Fund Analysis Report

Get Your Free (ECGOX): Fund Analysis Report

Get Your Free (TSDAX): Fund Analysis Report

Get Your Free (USERX): Fund Analysis Report

Original post

Zacks Investment Research