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3 Mutual Fund Misfires To Avoid In Your Retirement Portfolio - September 27, 2019 (Revised)
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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.
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.
Delaware Limited Term Diversified Income C (DTICX - Free Report) : This fund has an expense ratio of 1.45% and a management fee of 0.5%. 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. DTICX is a Diversified Bonds mutual fund. Investors looking for exposure to a variety of fixed income types that stretch across issuers, maturities, and credit levels will find a good fit with Diversified Bonds funds. The fund has lagged performance, so perhaps a simpler index future investing strategy might be more effective.
BlackRock US Mortgage Portfolio C (BMPCX - Free Report) . Expense ratio: 1.45%. Management fee: 1.25%. Over the last 5 years, this fund has generated annual returns of 1.75%. BMPCX is part of the Government Mortgage - Intermediate fund section. Government Mortgage - Intermediate funds focus on the mortgage-backed security (MBS) market and securities that usually have at least three years to maturity but less than 10.
Neuberger Berman International Equity A (NIQAX - Free Report) : This fund has an expense ratio of 1.21% and management fee of 1.04%. NIQAX 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. With an annual average return of 1.82% over the last five years, you are for most part paying in charges than in returns.
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.
Oppenheimer Discovery I (ODIIX - Free Report) : 0.67% expense ratio, 0.63% management fee. ODIIX is a Small Cap Growth mutual fund building their portfolio around stocks with market caps under $2 billion and large growth opportunities. With annual returns of 11.3% over the last five years, this fund is a winner.
VALIC Company I Large Cap Growth Fund (VLCGX - Free Report) has an expense ratio of 0.75% and management fee of 0.64%. VLCGX is a part of the Large Cap Growth mutual fund category, which invest in many large U.S. companies that are expected to grow much faster compared to other large-cap stocks. With annual returns of 11.79% over the last five years, this is a well-diversified fund with a long track record of success.
BMO Large-Cap Growth Fund Y : Expense ratio: 0.79%. Management fee: 0.35%. MASTX 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. MASTX has produced a 12.93% over the last five years.
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 27, 2019, should no longer be relied upon.)
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3 Mutual Fund Misfires To Avoid In Your Retirement Portfolio - September 27, 2019 (Revised)
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.
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.
Delaware Limited Term Diversified Income C (DTICX - Free Report) : This fund has an expense ratio of 1.45% and a management fee of 0.5%. 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. DTICX is a Diversified Bonds mutual fund. Investors looking for exposure to a variety of fixed income types that stretch across issuers, maturities, and credit levels will find a good fit with Diversified Bonds funds. The fund has lagged performance, so perhaps a simpler index future investing strategy might be more effective.
BlackRock US Mortgage Portfolio C (BMPCX - Free Report) . Expense ratio: 1.45%. Management fee: 1.25%. Over the last 5 years, this fund has generated annual returns of 1.75%. BMPCX is part of the Government Mortgage - Intermediate fund section. Government Mortgage - Intermediate funds focus on the mortgage-backed security (MBS) market and securities that usually have at least three years to maturity but less than 10.
Neuberger Berman International Equity A (NIQAX - Free Report) : This fund has an expense ratio of 1.21% and management fee of 1.04%. NIQAX 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. With an annual average return of 1.82% over the last five years, you are for most part paying in charges than in returns.
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.
Oppenheimer Discovery I (ODIIX - Free Report) : 0.67% expense ratio, 0.63% management fee. ODIIX is a Small Cap Growth mutual fund building their portfolio around stocks with market caps under $2 billion and large growth opportunities. With annual returns of 11.3% over the last five years, this fund is a winner.
VALIC Company I Large Cap Growth Fund (VLCGX - Free Report) has an expense ratio of 0.75% and management fee of 0.64%. VLCGX is a part of the Large Cap Growth mutual fund category, which invest in many large U.S. companies that are expected to grow much faster compared to other large-cap stocks. With annual returns of 11.79% over the last five years, this is a well-diversified fund with a long track record of success.
BMO Large-Cap Growth Fund Y : Expense ratio: 0.79%. Management fee: 0.35%. MASTX 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. MASTX has produced a 12.93% over the last five years.
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 27, 2019, should no longer be relied upon.)