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Does Your Retirement Portfolio Hold These 3 Mutual Fund Misfires? - October 08, 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 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.
Schwartz Value Fund (RCMFX - Free Report) : This fund has an expense ratio of 1.25% and a management fee of 0.95%. 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. RCMFX is a Small Cap Value mutual fund option, which typically invest in companies with market caps under $2 billion. The fund has lagged performance-wise, so perhaps a simpler index future investing strategy might be more effective.
Aberdeen Select International Equity Fund A (BJBIX - Free Report) : 1.52% expense ratio, 0.8% management fee. BJBIX 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. This fund has an annual returns of -1.38% over the last five years. Another fund guilty of having investors pay more in fees than returns.
Thornburg Limited Term Municipal CA C (LTCCX - Free Report) : This fund has an expense ratio of 1.21% and management fee of 0.49%. LTCCX 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. With an annual average return of 1.01% 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 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.
Oppenheimer Discovery Y (ODIYX - Free Report) : 0.84% expense ratio and 0.63% management fee. ODIYX is a Small Cap Growth mutual fund and tends to feature small companies in up-and-coming industries and markets. With an annual return of 12.4% over the last five years, this fund is a winner.
T. Rowe Price Cap Opportunity (PRCOX - Free Report) has an expense ratio of 0.69% and management fee of 0.49%. PRCOX is part of the Large Cap Blend section, and these mutual funds most often invest in firms with a market capitalization of $10 billion or more. By investing in bigger companies, these funds offer more stability, and are often well-suited for investors with a "buy and hold" mindset. With annual returns of 10.98% over the last five years, this is a well-diversified fund with a long track record of success.
JPMorgan Large Cap Growth A (OLGAX - Free Report) has an expense ratio of 0.93% and management fee of 0.5%. OLGAX 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. With annual returns of 13.81% over the last five years, this fund is a well-diversified fund with a long track record of success.
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:
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Does Your Retirement Portfolio Hold These 3 Mutual Fund Misfires? - October 08, 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 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.
Schwartz Value Fund (RCMFX - Free Report) : This fund has an expense ratio of 1.25% and a management fee of 0.95%. 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. RCMFX is a Small Cap Value mutual fund option, which typically invest in companies with market caps under $2 billion. The fund has lagged performance-wise, so perhaps a simpler index future investing strategy might be more effective.
Aberdeen Select International Equity Fund A (BJBIX - Free Report) : 1.52% expense ratio, 0.8% management fee. BJBIX 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. This fund has an annual returns of -1.38% over the last five years. Another fund guilty of having investors pay more in fees than returns.
Thornburg Limited Term Municipal CA C (LTCCX - Free Report) : This fund has an expense ratio of 1.21% and management fee of 0.49%. LTCCX 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. With an annual average return of 1.01% 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 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.
Oppenheimer Discovery Y (ODIYX - Free Report) : 0.84% expense ratio and 0.63% management fee. ODIYX is a Small Cap Growth mutual fund and tends to feature small companies in up-and-coming industries and markets. With an annual return of 12.4% over the last five years, this fund is a winner.
T. Rowe Price Cap Opportunity (PRCOX - Free Report) has an expense ratio of 0.69% and management fee of 0.49%. PRCOX is part of the Large Cap Blend section, and these mutual funds most often invest in firms with a market capitalization of $10 billion or more. By investing in bigger companies, these funds offer more stability, and are often well-suited for investors with a "buy and hold" mindset. With annual returns of 10.98% over the last five years, this is a well-diversified fund with a long track record of success.
JPMorgan Large Cap Growth A (OLGAX - Free Report) has an expense ratio of 0.93% and management fee of 0.5%. OLGAX 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. With annual returns of 13.81% over the last five years, this fund is a well-diversified fund with a long track record of success.
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