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.
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.
Legg Mason BW Absolute Return Opportunity R (LBARX): This fund has an expense ratio of 1.45% and a management fee of 0.64%. 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. LBARX is an Investment Grade Bond - Intermediate fund, which targets bonds that mature in more than three years but less than 15 years, and are a middle of the curve option for investors. The fund has lagged performance-wise, so perhaps a simpler index future investing strategy might be more effective.
Intrepid Endurance Fund Investor (ICMAX): 1.36% expense ratio, 1%. ICMAX is a Small Cap Value mutual fund option, which typically invest in companies with market caps under $2 billion. This fund has yearly returns of -0.18% over the most recent five years. Another fund liable of having investors pay more in charges than what they receive in return.
Highland Energy MLP Fund Y : This fund has an expense ratio of 0.01% and management fee of 1%. HEFYX is classified as a Sector - Energy mutual fund. Throughout the massive global energy sector, these funds hold a wide range of quickly changing and vitally important industries. With an annual average return of -18.09% 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.
JPMorgan Large Cap Growth R2 (JLGZX) is a fund that has an expense ratio of 1.18%, and a management fee of 0.45%. JLGZX 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 yearly returns of 12.48% over the last five years, this fund clearly wins.
Neuberger Berman Real Estate Fund I (NBRIX) has an expense ratio of 0.85% and management fee of 0.95%. NBRIX is categorized as a Sector - Real Estate mutual fund, which typically invests in various real estate investment trusts (REIT) due to their taxation rules. With annual returns of 10.96% over the last five years, this is a well-diversified fund with a long track record of success.
Brown Advisory Flexible Equity Investor (BIAFX) has an expense ratio of 0.72% and management fee of 0.44%. BIAFX is classified as an Allocation Balanced fund, which seeks to invest in a balance of asset types, like stocks, bonds, and cash, and including precious metals or commodities is not unusual. With yearly returns of 10.38% over the last five years, this fund is well-diversified with a long reputation of salutary performance.
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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