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Mutual Fund Misfires of the Market - October 07, 2019

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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 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.

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.

TCW Emerging Markets Local Currency Income I (TGWIX - Free Report) : 0.9% expense ratio and 0.75% management fee. TGWIX is classified as a Diversified Bonds fund, which offers exposure to a wide variety of fixed income types, stretching across various issuers, credit levels, and maturities. With a five year after-costs return of 0.02%, you're for the most part paying more in charges than returns.

Hartford Emerging Market Local Debt I (HLDIX - Free Report) : HLDIX is an International Bond - Emerging mutual fund, which focus on fixed income securities from emerging nations around the globe. HLDIX offers an expense ratio of 0.98% and annual returns of -0.32% 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.

361 Managed Futures Strategy Investor (AMFQX - Free Report) - 2.14% expense ratio, 1.59% management fee. This fund has yielded yearly returns of 0.35% in the course of the last five years. Too bad!

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.

BMO Large-Cap Growth Fund I (MLCIX - Free Report) is a winner, with an expense ratio of just 0.54% and a five-year annualized return track record of 13.21%.

Artisan Global Opportunities Institutional (APHRX - Free Report) has an expense ratio of 0.91% and management fee of 0.88%. APHRX 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. Thanks to yearly returns of 10.55% over the last five years, APHRX is an effectively diversified fund with a long reputation of solidly positive performance.

PIMCO StockPlus Long Duration Institutional (PSLDX - Free Report) : Expense ratio: 0.59%. Management fee: 0.59%. PSLDX is a Government Bond - Long fund. These mutual funds hold securities issued by the U.S. federal government, focus on the long end of the curve, and are seen as low-risk investments. PSLDX has produced a 15.73% 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

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