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3 Mutual Fund Misfires To Avoid In Your Retirement Portfolio - November 20, 2019
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You may need to start looking for a new financial advisor if your current one has put any of these high-fee, low-return "Mutual Fund Misfires of the Market" into your portfolio.
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.
Federated Fund for US Government Security B : 1.71% expense ratio and 0.41% management fee. FUSBX is a Government Mortgage - Intermediate mutual fund; these funds focus on the mortgage-backed securities (MBS) market and specifially, securities that have at least three years, but less than 10, to maturity. With a five year after-expenses return of 0.92%, you're mostly paying more in fees than returns.
Ivy Municipals Bond C : 1.7% expense ratio, 0.51% management fee. WMBCX is a Muni - Bonds mutual fund, which focus their investments on debt securities issued by state and local governments; these are typically used to pay for the construction of infrastructure, the operation of public schools, and other municipal functions. This fund has an annual returns of 0.85% over the last five years. Another fund guilty of having investors pay more in fees than returns.
StateStreet Disciplined Emerging Markets Equity N - 1.25% expense ratio, 0.75% management fee. SSEMX 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. SSEMX has generated annual returns of -0.94% 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.
Putnam Growth Opportunities A (POGAX - Free Report) is a winner, with an expense ratio of just 1.03% and a five-year annualized return track record of 12.22%.
Vanguard Dividend Growth Fund (VDIGX - Free Report) is a stand out fund. VDIGX is classified as a Large Cap Blend fund. More often than not, Large Cap Blend mutual funds invest in companies with a market cap of over $10 billion. Buying stakes in bigger companies offer these funds more stability, and are well-suited for investors with a "buy and hold" mindset. With five-year annualized performance of 11.63% and expense ratio of 0.26%, this diversified fund is an attractive buy with a strong history of performance.
Dreyfus/Boston Small/Mid-Cap Growth I (SDSCX - Free Report) : Expense ratio: 0.75%. Management fee: 0.6%. SDSCX is a Small Cap Blend mutual fund that usually targets companies with a market capitalization of less than $2 billion. SDSCX has produced a 11.59% over the last five years.
Bottom Line
So, there you have it - if your advisor has you invested in any of our "Mutual Fund Misfires of the Market," there is a good probability that they are either asleep at the wheel, incompetent, or (most likely) lining their pockets with high fee commissions at your financial expense.
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.
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3 Mutual Fund Misfires To Avoid In Your Retirement Portfolio - November 20, 2019
You may need to start looking for a new financial advisor if your current one has put any of these high-fee, low-return "Mutual Fund Misfires of the Market" into your portfolio.
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.
Federated Fund for US Government Security B : 1.71% expense ratio and 0.41% management fee. FUSBX is a Government Mortgage - Intermediate mutual fund; these funds focus on the mortgage-backed securities (MBS) market and specifially, securities that have at least three years, but less than 10, to maturity. With a five year after-expenses return of 0.92%, you're mostly paying more in fees than returns.
Ivy Municipals Bond C : 1.7% expense ratio, 0.51% management fee. WMBCX is a Muni - Bonds mutual fund, which focus their investments on debt securities issued by state and local governments; these are typically used to pay for the construction of infrastructure, the operation of public schools, and other municipal functions. This fund has an annual returns of 0.85% over the last five years. Another fund guilty of having investors pay more in fees than returns.
StateStreet Disciplined Emerging Markets Equity N - 1.25% expense ratio, 0.75% management fee. SSEMX 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. SSEMX has generated annual returns of -0.94% 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.
Putnam Growth Opportunities A (POGAX - Free Report) is a winner, with an expense ratio of just 1.03% and a five-year annualized return track record of 12.22%.
Vanguard Dividend Growth Fund (VDIGX - Free Report) is a stand out fund. VDIGX is classified as a Large Cap Blend fund. More often than not, Large Cap Blend mutual funds invest in companies with a market cap of over $10 billion. Buying stakes in bigger companies offer these funds more stability, and are well-suited for investors with a "buy and hold" mindset. With five-year annualized performance of 11.63% and expense ratio of 0.26%, this diversified fund is an attractive buy with a strong history of performance.
Dreyfus/Boston Small/Mid-Cap Growth I (SDSCX - Free Report) : Expense ratio: 0.75%. Management fee: 0.6%. SDSCX is a Small Cap Blend mutual fund that usually targets companies with a market capitalization of less than $2 billion. SDSCX has produced a 11.59% over the last five years.
Bottom Line
So, there you have it - if your advisor has you invested in any of our "Mutual Fund Misfires of the Market," there is a good probability that they are either asleep at the wheel, incompetent, or (most likely) lining their pockets with high fee commissions at your financial expense.
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.