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Does Your Retirement Portfolio Hold These 3 Mutual Fund Misfires? - November 11, 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.

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.

Rydex S&P Small Cap 600 Pure Value H (RYAZX - Free Report) : This fund has an expense ratio of 1.62% and a management fee of 0.75%. Without even doing any in-depth analysis, just the fact that you are paying more in fees than you're earning in returns is reason enough not to invest. RYAZX is a Small Cap Value mutual fund option, which typically invest in companies with market caps under $2 billion. The fund has lagged performance-wise, so perhaps a simpler index future investing strategy might be more effective.

Commonwealth Global (CNGLX - Free Report) : 2.53% expense ratio, 0.75%. CNGLX 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 0.94% over the most recent five years. Another fund liable of having investors pay more in charges than what they receive in return.

American Century Short Duration Inflation Protected R (APORX - Free Report) - 1.07% expense ratio, 0.56% management fee. APORX is classified as a Government - Bonds fund. These funds hold securities issued by the U.S. federal government in their portfolios, and focus across the curve, meaning the yields and interest rate sensitivity will vary. APORX has generated annual returns of 0.87% 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.

Cohen & Steers Real Estate Security I (CSDIX - Free Report) is a fund that has an expense ratio of 0.86%, and a management fee of 0.68%. CSDIX is categorized as a Sector - Real Estate mutual fund, which typically invests in various real estate investment trusts (REIT) due to their taxation rules. With yearly returns of 12.64% over the last five years, this fund clearly wins.

Columbia Small Cap Growth Fund I Class A (CGOAX - Free Report) is a stand out fund. CGOAX is one of many Small Cap Growth mutual funds; these funds tend to create their portfolios around stocks with market capitalization of less than $2 billion. With five-year annualized performance of 14.19% and expense ratio of 1.34%, this diversified fund is an attractive buy with a strong history of performance.

T. Rowe Price Blue Chip Growth R (RRBGX - Free Report) has an expense ratio of 1.22% and management fee of 0.56%. RRBGX 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 13.54% over the last five years, this fund is well-diversified with a long reputation of salutary performance.

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.

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