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3 Mutual Fund Misfires to Avoid - October 17, 2019
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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.
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.
Lord Abbett Inflation Focused F (LIFFX - Free Report) : Expense ratio: 0.58%. Management fee: 0.3%. After expenses, the 5 year return is -0.14%, meaning your fees are far higher than the fund's returns.
ClearBridge International Small Cap A : 1.42% expense ratio, 0.8%. LCOAX 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 yearly returns of -0.76% over the most recent five years. Another fund liable of having investors pay more in charges than what they receive in return.
Columbia Disciplined Small Core C - 2.11% expense ratio, 0.85% management fee. LSMCX is a Small Cap Value mutual fund, investing in small companies with stock market valuation less than $2 billion. LSMCX has generated annual returns of 1.1% over the last five years. Ouch!
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.
Putnam Small Cap Growth A (PNSAX - Free Report) : Expense ratio: 1.21%. Management fee: 0.57%. PNSAX is a Small Cap Growth mutual fund and tends to feature small companies in up-and-coming industries and markets. This fund has achieved five-year annual returns of an astounding 10.11%.
MassMutual Select Mid Cap Growth R3 (MEFNX - Free Report) is a stand out fund. MEFNX is a Mid Cap Growth mutual fund. These funds aim to target companies with a market capitalization between $2 billion and $10 billion that are also expected to exhibit more extensive growth opportunities for investors than their peers. With five-year annualized performance of 10.05% and expense ratio of 1.41%, this diversified fund is an attractive buy with a strong history of performance.
Harbor Large Cap Value Investor (HILVX - Free Report) has an expense ratio of 1.05% and management fee of 0.6%. HILVX is a Large Cap Value mutual fund, which invests in stocks with a market cap of $10 billion of more, but whose share prices do not reflect their intrinsic value. With annual returns of 10.75% 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:
Image: Bigstock
3 Mutual Fund Misfires to Avoid - October 17, 2019
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.
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.
Lord Abbett Inflation Focused F (LIFFX - Free Report) : Expense ratio: 0.58%. Management fee: 0.3%. After expenses, the 5 year return is -0.14%, meaning your fees are far higher than the fund's returns.
ClearBridge International Small Cap A : 1.42% expense ratio, 0.8%. LCOAX 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 yearly returns of -0.76% over the most recent five years. Another fund liable of having investors pay more in charges than what they receive in return.
Columbia Disciplined Small Core C - 2.11% expense ratio, 0.85% management fee. LSMCX is a Small Cap Value mutual fund, investing in small companies with stock market valuation less than $2 billion. LSMCX has generated annual returns of 1.1% over the last five years. Ouch!
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.
Putnam Small Cap Growth A (PNSAX - Free Report) : Expense ratio: 1.21%. Management fee: 0.57%. PNSAX is a Small Cap Growth mutual fund and tends to feature small companies in up-and-coming industries and markets. This fund has achieved five-year annual returns of an astounding 10.11%.
MassMutual Select Mid Cap Growth R3 (MEFNX - Free Report) is a stand out fund. MEFNX is a Mid Cap Growth mutual fund. These funds aim to target companies with a market capitalization between $2 billion and $10 billion that are also expected to exhibit more extensive growth opportunities for investors than their peers. With five-year annualized performance of 10.05% and expense ratio of 1.41%, this diversified fund is an attractive buy with a strong history of performance.
Harbor Large Cap Value Investor (HILVX - Free Report) has an expense ratio of 1.05% and management fee of 0.6%. HILVX is a Large Cap Value mutual fund, which invests in stocks with a market cap of $10 billion of more, but whose share prices do not reflect their intrinsic value. With annual returns of 10.75% 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