Back to top

Image: Bigstock

Mutual Fund Misfires of the Market - October 08, 2019

Read MoreHide Full Article

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 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.

Ivy Municipals Bond C : This fund has an expense ratio of 1.7% and a management fee of 0.51%. 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. WMBCX is a Muni - Bonds fund; these funds invest in debt securities issued by states and local municipalities, which are typically used to pay for infrastructure construction, schools, and other government functions. The fund has lagged performance-wise, so perhaps a simpler index future investing strategy might be more effective.

US Global Investor Gold & Precious Metals (USERX - Free Report) . Expense ratio: 1.7%. Management fee: 0.51%. Over the last 5 years, this fund has generated annual returns of 1.5%.

Clearbridge International Value C (SBICX - Free Report) : This fund has an expense ratio of 2% and management fee of 0.75%. SBICX 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 -2.98% 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

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.

Morgan Stanley Multi-Cap Growth Trust A (CPOAX - Free Report) : Expense ratio: 1.1%. Management fee: 0.66%. CPOAX 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. This fund has achieved five-year annual returns of an astounding 18.2%.

T. Rowe Price Small Cap Stock Fund (OTCFX - Free Report) has an expense ratio of 0.89% and management fee of 0.74%. OTCFX is a Small Cap Blend mutual fund, and usually targets stocks with market caps of less than $2 billion, letting investors diversify their funds among other kinds of small-cap equities. Thanks to yearly returns of 10.27% over the last five years, OTCFX is an effectively diversified fund with a long reputation of solidly positive performance.

JPMorgan Small Cap Growth I (OGGFX - Free Report) has an expense ratio of 0.99% and management fee of 0.65%. OGGFX is a Small Cap Growth mutual fund and tends to feature small companies in up-and-coming industries and markets. With yearly returns of 13.38% over the last five years, this fund is well-diversified with a long reputation of salutary performance.

Bottom Line

So, there you have it - if your advisor has you invested in any of our "Mutual Fund Misfires of the Market," there is a good probability that they are either asleep at the wheel, incompetent, or (most likely) lining their pockets with high fee commissions at your financial expense.

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

Published in