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Avoid These 3 Mutual Fund Misfires - September 26, 2019 (Revised)
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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 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.
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.
Loomis Sayles Strategy Income C (NECZX - Free Report) : Expense ratio: 1.71%. Management fee: 0.56%. After expenses, the 5 year return is 1.05%, meaning your fees are far higher than the fund's returns.
Templeton Foreign C (TEFTX - Free Report) . Expense ratio: 1.81%. Management fee: 0.56%. TEFTX is a part of the Non US - Equity fund category, many of which will focus across all cap levels, and will typically allocate their investments between emerging and developed markets. Over the last 5 years, this fund has generated annual returns of -1.92%.
Aquila Hawaiian Tax Free Trust C (HULCX - Free Report) : This fund has an expense ratio of 1.65% and management fee of 0.23%. HULCX is a Muni - Bonds mutual fund, which focus their investments on debt securities issued by state and local governments; these are typically used to pay for the construction of infrastructure, the operation of public schools, and other municipal functions. With an annual average return of 1.08% 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
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.
Vanguard Explorer Fund Admiral (VEXRX - Free Report) : Expense ratio: 0.34%. Management fee: 0.31%. VEXRX is a Small Cap Growth mutual fund and tends to feature small companies in up-and-coming industries and markets. This fund has achieved five-year annual returns of an astounding 10.01%.
MFS Research R5 (MFRKX - Free Report) has an expense ratio of 0.48% and management fee of 0.43%. MFRKX 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 10.81% over the last five years, this is a well-diversified fund with a long track record of success.
PRIMECAP Odyssey Aggressive Growth (POAGX - Free Report) has an expense ratio of 0.63% and management fee of 0.55%. POAGX is a Mid Cap Growth mutual fund. Mid Cap Growth funds pick stocks--usually companies with a market cap between $2 billion and $10 billion--that demonstrate extensive growth opportunities for investors compared to their peers. With yearly returns of 12.72% 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.
If you have concerns or any doubts about your investment advisor, read our just-released report:
(NOTE: We are re-issuing this article to correct an inaccuracy. The original article, published Tuesday, September 26, 2019, should no longer be relied upon.)
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Avoid These 3 Mutual Fund Misfires - September 26, 2019 (Revised)
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 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.
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.
Loomis Sayles Strategy Income C (NECZX - Free Report) : Expense ratio: 1.71%. Management fee: 0.56%. After expenses, the 5 year return is 1.05%, meaning your fees are far higher than the fund's returns.
Templeton Foreign C (TEFTX - Free Report) . Expense ratio: 1.81%. Management fee: 0.56%. TEFTX is a part of the Non US - Equity fund category, many of which will focus across all cap levels, and will typically allocate their investments between emerging and developed markets. Over the last 5 years, this fund has generated annual returns of -1.92%.
Aquila Hawaiian Tax Free Trust C (HULCX - Free Report) : This fund has an expense ratio of 1.65% and management fee of 0.23%. HULCX is a Muni - Bonds mutual fund, which focus their investments on debt securities issued by state and local governments; these are typically used to pay for the construction of infrastructure, the operation of public schools, and other municipal functions. With an annual average return of 1.08% 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
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.
Vanguard Explorer Fund Admiral (VEXRX - Free Report) : Expense ratio: 0.34%. Management fee: 0.31%. VEXRX is a Small Cap Growth mutual fund and tends to feature small companies in up-and-coming industries and markets. This fund has achieved five-year annual returns of an astounding 10.01%.
MFS Research R5 (MFRKX - Free Report) has an expense ratio of 0.48% and management fee of 0.43%. MFRKX 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 10.81% over the last five years, this is a well-diversified fund with a long track record of success.
PRIMECAP Odyssey Aggressive Growth (POAGX - Free Report) has an expense ratio of 0.63% and management fee of 0.55%. POAGX is a Mid Cap Growth mutual fund. Mid Cap Growth funds pick stocks--usually companies with a market cap between $2 billion and $10 billion--that demonstrate extensive growth opportunities for investors compared to their peers. With yearly returns of 12.72% 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.
If you have concerns or any doubts about your investment advisor, read our just-released report:
4 Warning Signs That Your Advisor Might be Sabotaging Your Financial Future
(NOTE: We are re-issuing this article to correct an inaccuracy. The original article, published Tuesday, September 26, 2019, should no longer be relied upon.)