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.
The easiest way to judge a mutual fund's quality over time is by analyzing its performance and fees. Our Zacks Rank of over 19,000 mutual funds has identified some of the worst of the worst mutual funds you should avoid, the funds with the highest fees and poorest long-term performance.
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.
AB Allocation Market Real Return Z (AMTZX): Expense ratio: 0.84%. Management fee: 0.75%. After expenses, the 5 year return is -3.79%, meaning your fees are far higher than the fund's returns. Hartford Emerging Market Local Debt R5 (HLDTX): 0.95% expense ratio, 0.85% management fee. HLDTX 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 -0.38% over the last five years. Another fund guilty of having investors pay more in fees than returns. AQR Style Premia Alternative N ( QSPNX Quick Quote QSPNX - Free Report) - 1.75% expense ratio, 1.35% management fee. QSPNX is a Long Short - Equity fund, and these funds aim to minimize exposure to the broader market, taking long positions in equities that are expected to appreciate and short positions in equities that are projected to decline. QSPNX has generated annual returns of 1.7% over the last five years. Ouch! 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.
Neuberger Berman Mid Cap Growth I (NBMLX) is a fund that has an expense ratio of 0.7%, and a management fee of 0.65%. NBMLX is a Mid Cap Growth mutual fund. Mid Cap Growth funds pick stocks--usually companies with a market cap between $2 billion and $10 billion--that demonstrate extensive growth opportunities for investors compared to their peers. With yearly returns of 11.01% over the last five years, this fund clearly wins. DFA Enhanced US Large Company I (DFELX) has an expense ratio of 0.15% and management fee of 0.2%. DFELX is classified as a Large Cap Blend fund. More often than not, Large Cap Blend mutual funds invest in companies with a market cap of over $10 billion. Buying stakes in bigger companies offer these funds more stability, and are well-suited for investors with a "buy and hold" mindset. Thanks to yearly returns of 10.62% over the last five years, DFELX is an effectively diversified fund with a long reputation of solidly positive performance. Rydex Nova Investor (RYNVX) is an attractive fund with a five-year annualized return of 13.15% and an expense ratio of just 1.35%. RYNVX 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. Bottom Line
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