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3 Mutual Fund Misfires to Avoid - November 06, 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.

How can you tell a good mutual fund from a bad one? It's pretty basic: If the fund has high fees and performs poorly, it's not good. Of course, there's a range - but when a mutual fund earns a Zacks Rank of #5 (Strong Sell) that means it's among the worst of roughly 19,000 funds we rate each day.

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 B : 1.64% expense ratio and 0.51% management fee. WMBBX is a Muni - Bonds mutual 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 a five year after-expenses return of 1.28%, you're mostly paying more in fees than returns.

Brookfield Global Listed Infrastructure C (BGLCX - Free Report) : 2.1% expense ratio, 0.85%. BGLCX is a Global - Equity mutual fund. These funds invest in large markets like the U.S., Europe, and Japan, and operate with very few geographical limitations. This fund has yearly returns of 0.34% over the most recent five years. Another fund liable of having investors pay more in charges than what they receive in return.

Gabelli Focus Five Fund AAA (GWSVX - Free Report) - 1.71% expense ratio, 1% management fee. GWSVX is a Small Cap Value mutual fund option, which typically invest in companies with market caps under $2 billion. GWSVX has generated annual returns of -1.2% 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.

MFS Mass Investors Growth Stock 529A is a winner, with an expense ratio of just 0.76% and a five-year annualized return track record of 12.32%.

Principal Real Estate Security R4 (PRETX - Free Report) has an expense ratio of 1.19% and management fee of 0.81%. Sector - Real Estate funds like PRETX are known to invest in real estate investment trusts (REITs). A popular income vehicle thanks to its taxation rules, a REIT is required to pay out at least 90% of its income annually to avoid double taxation. Thanks to yearly returns of 11.34% over the last five years, PRETX is an effectively diversified fund with a long reputation of solidly positive performance.

DoubleLine Shiller Enhanced CAPE N (DSENX - Free Report) has an expense ratio of 0.8% and management fee of 0.45%. DSENX 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 13.67% over the last five years, this fund is a well-diversified fund with a long track record of success.

Bottom Line

We hope that your investment advisor (if you use one) has you invested in one or all of the top-ranked mutual funds we've reviewed. But if that is not the case, and your advisor has you invested in any of the funds on our "worst offender" list, it might be time to have a conversation or reconsider this vitally important relationship.

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

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