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Are You Invested In These 3 Mutual Fund Misfires? - November 26, 2019
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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.
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.
Highland Long/Short Healthcare Z (HHCZX - Free Report) : 2.36% expense ratio and 1% management fee. HHCZX is a Long Short - Equity option. These funds' investment strategy consists of minimizing overall market exposure, while at the same time taking long positions in equities that are expected to appreciate and short positions in equities that are projected to decline. With a five year after-expenses return of -0.42%, you're mostly paying more in fees than returns.
Harding Loevner Front Emerging Markets Institutional (HLFMX - Free Report) . Expense ratio: 1.65%. Management fee: 1%. Over the last 5 years, this fund has generated annual returns of -3.76%.
Dreyfus GNMA C (GPNCX - Free Report) - 1.92% expense ratio, 0.5% management fee. GPNCX is part of the Government Mortgage - Intermediate fund section. Government Mortgage - Intermediate funds focus on the mortgage-backed security (MBS) market and securities that usually have at least three years to maturity but less than 10. GPNCX has generated annual returns of 1.11% over the last five years. Ouch!
3 Top Ranked Mutual Funds
Since you've seen the most noticeably lowest Zacks Ranked mutual funds, how about we take a look at some of the top ranked mutual funds with the least fees.
DoubleLine Shiller Enhanced CAPE N (DSENX - Free Report) is a fund that has an expense ratio of 0.8%, and a management fee of 0.45%. DSENX 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 yearly returns of 13.67% over the last five years, this fund clearly wins.
AQR Large Cap Momentum Style R6 (QMORX - Free Report) : Expense ratio: 0.3%. Management fee: 0.25%. QMORX is a Large Cap Growth mutual fund, and these funds invest in many large U.S. firms that are projected to grow at a faster rate than their large-cap peers. QMORX has managed to produce a robust 10.33% over the last five years.
Vanguard Global Minimum Volatility Fund Admiral (VMNVX - Free Report) is an attractive fund with a five-year annualized return of 10.54% and an expense ratio of just 0.15%. VMNVX 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.
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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Are You Invested In These 3 Mutual Fund Misfires? - November 26, 2019
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.
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.
Highland Long/Short Healthcare Z (HHCZX - Free Report) : 2.36% expense ratio and 1% management fee. HHCZX is a Long Short - Equity option. These funds' investment strategy consists of minimizing overall market exposure, while at the same time taking long positions in equities that are expected to appreciate and short positions in equities that are projected to decline. With a five year after-expenses return of -0.42%, you're mostly paying more in fees than returns.
Harding Loevner Front Emerging Markets Institutional (HLFMX - Free Report) . Expense ratio: 1.65%. Management fee: 1%. Over the last 5 years, this fund has generated annual returns of -3.76%.
Dreyfus GNMA C (GPNCX - Free Report) - 1.92% expense ratio, 0.5% management fee. GPNCX is part of the Government Mortgage - Intermediate fund section. Government Mortgage - Intermediate funds focus on the mortgage-backed security (MBS) market and securities that usually have at least three years to maturity but less than 10. GPNCX has generated annual returns of 1.11% over the last five years. Ouch!
3 Top Ranked Mutual Funds
Since you've seen the most noticeably lowest Zacks Ranked mutual funds, how about we take a look at some of the top ranked mutual funds with the least fees.
DoubleLine Shiller Enhanced CAPE N (DSENX - Free Report) is a fund that has an expense ratio of 0.8%, and a management fee of 0.45%. DSENX 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 yearly returns of 13.67% over the last five years, this fund clearly wins.
AQR Large Cap Momentum Style R6 (QMORX - Free Report) : Expense ratio: 0.3%. Management fee: 0.25%. QMORX is a Large Cap Growth mutual fund, and these funds invest in many large U.S. firms that are projected to grow at a faster rate than their large-cap peers. QMORX has managed to produce a robust 10.33% over the last five years.
Vanguard Global Minimum Volatility Fund Admiral (VMNVX - Free Report) is an attractive fund with a five-year annualized return of 10.54% and an expense ratio of just 0.15%. VMNVX 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.
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.