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.
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 Cundill Global Value I (ICVIX - Free Report) : Expense ratio: 1.12%. Management fee: 1%. After expenses, the 5 year return is -0.4%, meaning your fees are far higher than the fund's returns.
AB International Growth B : 2.25% expense ratio, 0.75%. AWPBX is a Non US - Equity fund. Many of these funds like to allocate across emerging and developed markets, and will often focus on all cap levels. This fund has yearly returns of 1.48% over the most recent five years. Another fund liable of having investors pay more in charges than what they receive in return.
Eaton Vance Short Duration Government Income C (ECLDX - Free Report) : Expense ratio: 1.41%. Management fee: 0.5%. ECLDX is part of the Government Mortgage - Short fund section. Government Mortgage - Short funds focus on the mortgage-backed security (MBS) market and securities that usually have less than three years until maturity. With annual returns of just 0.9%, it's no surprise this fund has received Zacks' "Strong Sell" ranking.
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.
Principal Mid Cap Growth III R5 (PPQPX - Free Report) is a fund that has an expense ratio of 1.17%, and a management fee of 0.98%. PPQPX is a Mid Cap Growth mutual fund. These mutual funds choose companies with a stock market valuation between $2 billion and $10 billion. With yearly returns of 10.23% over the last five years, this fund clearly wins.
MFS Mass Investors Growth Stock I (MGTIX - Free Report) is a stand out fund. MGTIX 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 five-year annualized performance of 13.9% and expense ratio of 0.48%, this diversified fund is an attractive buy with a strong history of performance.
T. Rowe Price Capital Opportunity A (PACOX - Free Report) has an expense ratio of 0.93% and management fee of 0.49%. PACOX 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 10.88% over the last five years, this fund is a well-diversified fund with a long track record of success.
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.
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