Mutual Fund Misfires Of The Market - March 24, 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.

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.

Hartford Global Real Asset C (HRLCX): Expense ratio: 2%. Management fee: 0.8%. After expenses, the 5 year return is 0.96%, meaning your fees are far higher than the fund's returns.

Leader Total Return C (LCCTX). Expense ratio: 2.8%. Management fee: 0.8%. Over the last 5 years, this fund has generated annual returns of 0.75%.

Templeton Frontier Markets Adviser (FFRZX): Expense ratio: 1.71%. Management fee: 1.4%. FFRZX 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 annual returns of just -3.05%, it's no surprise this fund has received Zacks' "Strong Sell" ranking.

3 Top Ranked Mutual Funds

There you have it: some prime examples of truly bad mutual funds. In contrast, here are a few funds that have achieved high Zacks Ranks and have low fees.

Royce International Premier Fund Investment (RIPNX) is a winner, with an expense ratio of just 1.13% and a five-year annualized return track record of 13.03%.

DFA US Large Cap Equity Institutional (DUSQX): Expense ratio: 0.19%. Management fee: 0.15%. DUSQX 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. DUSQX has managed to produce a robust 11% over the last five years.

Principal Small Cap Growth I Institutional (PGRTX) has an expense ratio of 1.02% and management fee of 1.08%. PGRTX 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 12.04% over the last five years, this fund is well-diversified with a long reputation of salutary performance.

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.

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 (DUSQX): Fund Analysis Report

Get Your Free (PGRTX): Fund Analysis Report

Get Your Free (RIPNX): Fund Analysis Report

Get Your Free (HRLCX): Fund Analysis Report

Get Your Free (LCCTX): Fund Analysis Report

Get Your Free (FFRZX): Fund Analysis Report

Original post

Zacks Investment Research