If your advisor has you invested in any of these "Mutual Fund Misfires of the Market" with high fees and low returns, you need to rethink your 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.
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.
Wells Fargo International Equity C (WFEFX - Free Report) : 2.15% expense ratio and 0.85% management fee. WFEFX is a Non US - Equity option, focusing their investments acoss emerging and developed markets, and can often extend across cap levels too. With a five year after-expenses return of 1.71%, you're mostly paying more in fees than returns.
Touchstone Ultra Short Duration Fixed Income A (TSDAX - Free Report) : 0.69% expense ratio, 0.25% management fee. TSDAX is a Government Bond - Short fund, and these funds hold securities issued by the U.S. federal government. This category focuses on the short end of the curve, and are seen as extremely low risk securities from a default perspective. This fund has an annual returns of -0.65% over the last five years. Another fund guilty of having investors pay more in fees than returns.
ProFunds Telecom UltraSector Investor (TCPIX - Free Report) - 1.83% expense ratio, 0.75% management fee. This fund has yielded yearly returns of 1.3% in the course of the last five years. Too bad!
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.
MFS Research R5 (MFRKX - Free Report) : 0.48% expense ratio and 0.43% management fee. MFRKX is a part of the Large Cap Growth mutual fund category, which invest in many large U.S. companies that are expected to grow much faster compared to other large-cap stocks. With an annual return of 11.1% over the last five years, this fund is a winner.
TIAA-CREF Real Estate Security Retail (TCREX - Free Report) is a stand out fund. TCREX is a Sector - Real Estate fund, and these kinds of mutual funds typically invest in eeal estate investment trusts (REITs) due to their taxation rules. With five-year annualized performance of 11.53% and expense ratio of 0.81%, this diversified fund is an attractive buy with a strong history of performance.
Janus Henderson Enterprise N (JDMNX - Free Report) is an attractive fund with a five-year annualized return of 14.98% and an expense ratio of just 0.66%. JDMNX is a Mid Cap Growth mutual fund. These mutual funds choose companies with a stock market valuation between $2 billion and $10 billion.
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.
Do You Know the Top 9 Retirement Investing Mistakes?
Whether you're planning to retire early or not, don't let investing mistakes derail your plans.
If you have $500,000 or more to invest and want to learn more, click the link to download our free report, 9 Retirement Mistakes that will Ruin Your Retirement.