You may need to start looking for a new financial advisor if your current one has put any of these high-fee, low-return "Mutual Fund Misfires of the Market" into your portfolio.
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.
Lord Abbett Inflation Focused R3 (LIFRX - Free Report) : Expense ratio: 0.99%. Management fee: 0.3%. After expenses, the 5 year return is -0.8%, meaning your fees are far higher than the fund's returns.
Hartford Emerging Market Local Debt R4 (HLDSX - Free Report) : 1.25% expense ratio, 0.85% management fee. HLDSX is an International Bond - Emerging mutual fund, which focus on fixed income securities from emerging nations around the globe. This fund has an annual returns of -0.58% over the last five years. Another fund guilty of having investors pay more in fees than returns.
Ivy International Core Equity R (IYITX - Free Report) : This fund has an expense ratio of 1.53% and management fee of 0.75%. IYITX is a Non US - Equity option, focusing their investments acoss emerging and developed markets, and can often extend across cap levels too. With an annual average return of 0.8% 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
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.
Capital Group US Equity (CUSEX - Free Report) is a fund that has an expense ratio of 0.43%, and a management fee of 0.43%. CUSEX 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 yearly returns of 10.04% over the last five years, this fund clearly wins.
Putnam Multi-Cap Growth Fund A (PNOPX - Free Report) is a stand out fund. PNOPX is an All Cap Growth mutual fund investing in a wide variety of equities, no matter the size of the company and as long as the firm exhibits growth characteristics. With five-year annualized performance of 11.35% and expense ratio of 1%, this diversified fund is an attractive buy with a strong history of performance.
AB Discovery Growth A (CHCLX - Free Report) : Expense ratio: 0.94%. Management fee: 0.62%. CHCLX is a Mid Cap Blend mutual fund that typically features a portfolio filled with stocks of various sizes and styles; it allows for a diversification strategy focusing on companies with market caps between $2 billion and $10 billion. CHCLX has produced a 10.27% over the last five years.
Along these lines, there you have it - if your financial guide has you put your money into any of our "Mutual Fund Misfires of the Market," there is a strong likelihood that they are either dormant at the worst possible time, inept, or (in all probability) filling their pockets with high fee commissions at the cost of your financial objectives.
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