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3 Mutual Fund Misfires to Avoid - November 29, 2019

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If your financial advisor made you buy any of these "Mutual Fund Misfires of the Market" with high expenses and low returns, you need to reassess your 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.

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.

Lord Abbett Inflation Focused R3 (LIFRX - Free Report) : Expense ratio: 0.98%. Management fee: 0.3%. After expenses, the 5 year return is -0.45%, meaning your fees are far higher than the fund's returns.

Legg Mason BW Absolute Return Opportunity FI (LBAFX - Free Report) : 1.2% expense ratio, 0.64% management fee. LBAFX 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. This fund has an annual returns of 0.44% over the last five years. Another fund guilty of having investors pay more in fees than returns.

Northeast Investors Trust (NTHEX - Free Report) : This fund has an expense ratio of 1.55% and management fee of 0.5%. NTHEX is a High Yield - Bonds fund. Often referred to as junk bonds, High Yield - Bonds funds sit below investment grade, meaning they are at a high default risk compared to their investment grade peers. With an annual average return of -2.68% 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.

AB Small Cap Growth A (QUASX - Free Report) is a fund that has an expense ratio of 1.15%, and a management fee of 0.75%. QUASX is a Small Cap Blend mutual fund, allowing investors a way to diversify their funds among various types of small-cap stocks. With yearly returns of 10.84% over the last five years, this fund clearly wins.

Hartford Stock HLS IA (HSTAX - Free Report) has an expense ratio of 0.52% and management fee of 0.48%. HSTAX 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. Thanks to yearly returns of 11.79% over the last five years, HSTAX is an effectively diversified fund with a long reputation of solidly positive performance.

SEI Institutional Investor Trust US Managed Volaty A (SVYAX - Free Report) has an expense ratio of 0.2% and management fee of 0.65%. SVYAX is a part of the Large Cap Value category, and invests in equities with a market capitalization of $10 billion or more, but whose share prices do not reflect their intrinsic value. With annual returns of 10.5% over the last five years, this fund is a well-diversified fund with a long track record of success.

Bottom Line

We hope that your investment advisor (if you use one) has you invested in one or all of the top-ranked mutual funds we've reviewed. But if that is not the case, and your advisor has you invested in any of the funds on our "worst offender" list, it might be time to have a conversation or reconsider this vitally important relationship.

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