Back to top

Image: Bigstock

Avoid These 3 Mutual Fund Misfires - November 12, 2019

Read MoreHide Full Article

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.

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.

AB Allocation Market Real Return I (AMTIX): 0.85% expense ratio and 0.75% management fee. AMTIX is an Allocation Balanced mutual fund. Allocation Balanced funds look to invest across asset types, like stocks, bonds, and cash, and including precious metals or commodities is not unusual; these funds are mostly categorized by their respective asset allocation. With a five year after-expenses return of -2.29%, you're mostly paying more in fees than returns.

Russell Emerging Markets E (REMEX): 1.66% expense ratio, 1.14% management fee. REMEX 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 an annual returns of 1.15% over the last five years. Another fund guilty of having investors pay more in fees than returns.

ProFunds Europe 30 Investor (UEPIX - Free Report) - 1.78% expense ratio, 0.75% management fee. This fund has yielded yearly returns of 0.45% in the course of the last five years. Too bad!

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.

MassMutual Select Small Cap Growth Equity I (MSGZX): 0.86% expense ratio and 0.8% management fee. MSGZX is a Small Cap Growth mutual fund and tends to feature small companies in up-and-coming industries and markets. With an annual return of 10.65% over the last five years, this fund is a winner.

Neuberger Berman Real Estate Fund R3 (NRERX) has an expense ratio of 1.46% and management fee of 1.06%. NRERX is categorized as a Sector - Real Estate mutual fund, which typically invests in various real estate investment trusts (REIT) due to their taxation rules. Thanks to yearly returns of 10.31% over the last five years, NRERX is an effectively diversified fund with a long reputation of solidly positive performance.

Janus Henderson Global Technology D (JNGTX) is an attractive fund with a five-year annualized return of 18.78% and an expense ratio of just 0.84%. JNGTX is a Sector - Tech mutual fund, allowing investors to own a stake in a notoriously volatile sector with a much more diversified approach.

Bottom Line

These examples underscore the huge range in quality of mutual funds - from the really bad to the astonishingly good. There is no reason for your advisor to keep your money in any fund that charges more than you get in return (unless they're getting something out of it, like a high commission).

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.

In-Depth Zacks Research for the Tickers Above

Normally $25 each - click below to receive one report FREE:

ProFunds Europe 30 Inv (UEPIX) - free report >>

Published in