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.
High fees plus poor performance: It's a pretty simple formula for a bad mutual fund. Some are worse than others - and some are so bad that they have earned a "Strong Sell" on the Zacks Rank, the lowest ranking of the nearly 19,000 mutual funds we rank daily.
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.
BlackRock Eurofund R (MREFX - Free Report) : This fund has an expense ratio of 2.01% 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. MREFX is a Europe - Equity mutual fund option, and these funds tend to invest their assets in stocks across the European continent, including countries such as Great Britain, Germany, France, Italy, and Spain. The fund has lagged performance-wise, so perhaps a simpler index future investing strategy might be more effective.
Columbia Disciplined Small Core C (LSMCX - Free Report) . Expense ratio: 2.11%. Management fee: 0.75%. Over the last 5 years, this fund has generated annual returns of 1.1%.
Touchstone Ultra Short Duration Fixed Income I (TSDIX - Free Report) : This fund has an expense ratio of 0.39% and management fee of 0.25%. TSDIX 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. With an annual average return of -0.28% over the last five years, the only thing absolute about this absolute return fund is that it absolutely deserves to be on our "worst offender" list.
3 Top Ranked Mutual Funds
Now that we've covered our "worst offender" list, let's take a look at some of Zacks' highest ranked mutual funds with some of the lowest fees you may want to consider.
Principal Large Cap Growth I R3 (PPUMX - Free Report) : 1.16% expense ratio and 0.6% management fee. PPUMX 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 an annual return of 10.91% over the last five years, this fund is a winner.
Virtus KAR Small-Cap Core A (PKSAX - Free Report) has an expense ratio of 1.29% and management fee of 0.75%. PKSAX is a Small Cap Blend mutual fund, and usually targets stocks with market caps of less than $2 billion, letting investors diversify their funds among other kinds of small-cap equities. Thanks to yearly returns of 16.29% over the last five years, PKSAX is an effectively diversified fund with a long reputation of solidly positive performance.
Neuberger Berman Real Estate Fund Trust (NBRFX - Free Report) is an attractive fund with a five-year annualized return of 10.76% and an expense ratio of just 1.04%. Sector - Real Estate funds like NBRFX 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.
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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