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3 Mutual Fund Misfires to Avoid - November 22, 2019
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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.
Hartford Global Real Asset A (HRLAX - Free Report) : 1.25% expense ratio and 0.85% management fee. HRLAX is a Global - Equity mutual fund investing in bigger markets like the U.S., Europe, and Japan; these kinds of funds aren't limited by geography. With a five year after-costs return of -2.89%, you're for the most part paying more in charges than returns.
AB Allocation Market Real Return 1 (AMTOX - Free Report) . Expense ratio: 1.09%. Management fee: 0.85%. Over the last 5 years, this fund has generated annual returns of -2.52%.
Alger International Growth B (AFGPX - Free Report) : This fund has an expense ratio of 1.98% and management fee of 0.71%. AFGPX is a Non US - Equity option, focusing their investments acoss emerging and developed markets, and can often extend across cap levels too. With an annual average return of -0.54% 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 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.
Principal Capital Appreciation R1 (PCAMX - Free Report) : 1.37% expense ratio and 0.47% management fee. PCAMX is part of the Large Cap Blend section, and these mutual funds most often invest in firms with a market capitalization of $10 billion or more. By investing in bigger companies, these funds offer more stability, and are often well-suited for investors with a "buy and hold" mindset. With an annual return of 10.21% over the last five years, this fund is a winner.
Fidelity Select Electronics (FSELX - Free Report) is a stand out fund. FSELX is a Sector - Tech mutual fund, allowing investors to own a stake in a notoriously volatile sector with a much more diversified approach. With five-year annualized performance of 18.12% and expense ratio of 0.72%, this diversified fund is an attractive buy with a strong history of performance.
JPMorgan Large Cap Growth R6 (JLGMX - Free Report) has an expense ratio of 0.43% and management fee of 0.45%. JLGMX 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 annual returns of 14.47% over the last five years, this fund is a well-diversified fund with a long track record of success.
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.
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3 Mutual Fund Misfires to Avoid - November 22, 2019
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.
Hartford Global Real Asset A (HRLAX - Free Report) : 1.25% expense ratio and 0.85% management fee. HRLAX is a Global - Equity mutual fund investing in bigger markets like the U.S., Europe, and Japan; these kinds of funds aren't limited by geography. With a five year after-costs return of -2.89%, you're for the most part paying more in charges than returns.
AB Allocation Market Real Return 1 (AMTOX - Free Report) . Expense ratio: 1.09%. Management fee: 0.85%. Over the last 5 years, this fund has generated annual returns of -2.52%.
Alger International Growth B (AFGPX - Free Report) : This fund has an expense ratio of 1.98% and management fee of 0.71%. AFGPX is a Non US - Equity option, focusing their investments acoss emerging and developed markets, and can often extend across cap levels too. With an annual average return of -0.54% 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 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.
Principal Capital Appreciation R1 (PCAMX - Free Report) : 1.37% expense ratio and 0.47% management fee. PCAMX is part of the Large Cap Blend section, and these mutual funds most often invest in firms with a market capitalization of $10 billion or more. By investing in bigger companies, these funds offer more stability, and are often well-suited for investors with a "buy and hold" mindset. With an annual return of 10.21% over the last five years, this fund is a winner.
Fidelity Select Electronics (FSELX - Free Report) is a stand out fund. FSELX is a Sector - Tech mutual fund, allowing investors to own a stake in a notoriously volatile sector with a much more diversified approach. With five-year annualized performance of 18.12% and expense ratio of 0.72%, this diversified fund is an attractive buy with a strong history of performance.
JPMorgan Large Cap Growth R6 (JLGMX - Free Report) has an expense ratio of 0.43% and management fee of 0.45%. JLGMX 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 annual returns of 14.47% over the last five years, this fund is a well-diversified fund with a long track record of success.
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.