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3 Mutual Fund Misfires to Avoid - October 04, 2019
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Does your current advisor have your money invested in these "Mutual Fund Misfires of the Market" that charge high fees for low returns? If so, it may be time for a new 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.
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.
AB Allocation Market Real Return C (ACMTX - Free Report) : 2.01% expense ratio and 0.75% management fee. ACMTX is a part of the Allocation Balanced fund category; these funds like to invest in a variety of asset types, finding a balance between stocks, bonds, cash, and sometimes even precious metals and commodities; they are mostly categorized by their respective asset allocation. With a five year after-costs return of -4.88%, you're for the most part paying more in charges than returns.
Columbia Disciplined Small Core R5 : CLLRX is a Small Cap Value mutual fund, investing in small companies with stock market valuation less than $2 billion. CLLRX offers an expense ratio of 0.99% and annual returns of 0.83% 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.
Hartford Global Real Asset I (HRLIX - Free Report) : Expense ratio: 0.97%. Management fee: 0.85%. HRLIX is a Global - Equity mutual fund investing in bigger markets like the U.S., Europe, and Japan; these kinds of funds aren't limited by geography. With annual returns of just -2.25%, it's no surprise this fund has received Zacks' "Strong Sell" ranking.
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.
WCM Focused Global Growth Investor (WFGGX - Free Report) is a winner, with an expense ratio of just 1.4% and a five-year annualized return track record of 12.38%.
AB Discovery Growth Z (CHCZX - Free Report) has an expense ratio of 0.66% and management fee of 0.62%. CHCZX is a Mid Cap Blend mutual fund, and usually features a portfolio with stocks of various styles and sizes, allowing for diversification within a strategy that focuses on mid cap companies. With annual returns of 11.52% over the last five years, this is a well-diversified fund with a long track record of success.
Fidelity Series Opportunistic Insights (FVWSX - Free Report) : Expense ratio: 0.02%. Management fee: 0%. FVWSX is a Large Cap Growth option; these mutual funds purchase stakes in numerous large U.S. companies that are expected to develop and grow at a faster rate than other large-cap stocks. FVWSX has produced a 13.02% over the last five years.
Bottom Line
These examples underscore the huge range in quality of mutual funds - from the really bad to the astonishingly good. There is no reason for your advisor to keep your money in any fund that charges more than you get in return (unless they're getting something out of it, like a high commission).
If you have concerns or any doubts about your investment advisor, read our just-released report:
Image: Bigstock
3 Mutual Fund Misfires to Avoid - October 04, 2019
Does your current advisor have your money invested in these "Mutual Fund Misfires of the Market" that charge high fees for low returns? If so, it may be time for a new 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.
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.
AB Allocation Market Real Return C (ACMTX - Free Report) : 2.01% expense ratio and 0.75% management fee. ACMTX is a part of the Allocation Balanced fund category; these funds like to invest in a variety of asset types, finding a balance between stocks, bonds, cash, and sometimes even precious metals and commodities; they are mostly categorized by their respective asset allocation. With a five year after-costs return of -4.88%, you're for the most part paying more in charges than returns.
Columbia Disciplined Small Core R5 : CLLRX is a Small Cap Value mutual fund, investing in small companies with stock market valuation less than $2 billion. CLLRX offers an expense ratio of 0.99% and annual returns of 0.83% 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.
Hartford Global Real Asset I (HRLIX - Free Report) : Expense ratio: 0.97%. Management fee: 0.85%. HRLIX is a Global - Equity mutual fund investing in bigger markets like the U.S., Europe, and Japan; these kinds of funds aren't limited by geography. With annual returns of just -2.25%, it's no surprise this fund has received Zacks' "Strong Sell" ranking.
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.
WCM Focused Global Growth Investor (WFGGX - Free Report) is a winner, with an expense ratio of just 1.4% and a five-year annualized return track record of 12.38%.
AB Discovery Growth Z (CHCZX - Free Report) has an expense ratio of 0.66% and management fee of 0.62%. CHCZX is a Mid Cap Blend mutual fund, and usually features a portfolio with stocks of various styles and sizes, allowing for diversification within a strategy that focuses on mid cap companies. With annual returns of 11.52% over the last five years, this is a well-diversified fund with a long track record of success.
Fidelity Series Opportunistic Insights (FVWSX - Free Report) : Expense ratio: 0.02%. Management fee: 0%. FVWSX is a Large Cap Growth option; these mutual funds purchase stakes in numerous large U.S. companies that are expected to develop and grow at a faster rate than other large-cap stocks. FVWSX has produced a 13.02% over the last five years.
Bottom Line
These examples underscore the huge range in quality of mutual funds - from the really bad to the astonishingly good. There is no reason for your advisor to keep your money in any fund that charges more than you get in return (unless they're getting something out of it, like a high commission).
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