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Avoid These 3 Mutual Fund Misfires - December 06, 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.
High fees plus poor performance: It's a pretty simple formula for a bad mutual fund. Some are worse than others - and some are so bad that they have earned a "Strong Sell" on the Zacks Rank, the lowest ranking of the nearly 19,000 mutual funds we rank daily.
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.
Ascendant Deep Value Convertibles I : Expense ratio: 2.15%. Management fee: 1.15%. After expenses, the 5 year return is 0.07%, meaning your fees are far higher than the fund's returns.
Brandes International Small Cap Equity I (BISMX - Free Report) : BISMX is a Non US - Equity option, focusing their investments acoss emerging and developed markets, and can often extend across cap levels too. BISMX offers an expense ratio of 1.15% and annual returns of -0.65% over the last five years. Even if this fund can be positioned as a hedge during the recent bull-market, paying more in fees than returns over the long-term should never be an acceptable result.
Leader Short-Term Bond Fund C - 2.16% expense ratio, 0.75% management fee. LCMCX is an Investment Grade Bond - Short option; these funds focus on the short end of the curve, generally with bonds that mature in less than two years. LCMCX has generated annual returns of -0.75% over the last five years. Ouch!
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.
Neuberger Berman Real Estate Fund R6 (NRREX - Free Report) is a fund that has an expense ratio of 0.77%, and a management fee of 0.85%. NRREX 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 yearly returns of 11.04% over the last five years, this fund clearly wins.
MFS Mid-Cap Growth R6 (OTCKX - Free Report) is a stand out fund. OTCKX is a Mid Cap Growth mutual fund. These funds aim to target companies with a market capitalization between $2 billion and $10 billion that are also expected to exhibit more extensive growth opportunities for investors than their peers. With five-year annualized performance of 13.94% and expense ratio of 0.77%, this diversified fund is an attractive buy with a strong history of performance.
Diamond Hill Large Cap Fund Y (DHLYX - Free Report) : Expense ratio: 0.55%. Management fee: 0.5%. DHLYX 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. DHLYX has produced a 11.05% over the last five years.
Bottom Line
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.
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.
Image: Bigstock
Avoid These 3 Mutual Fund Misfires - December 06, 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.
High fees plus poor performance: It's a pretty simple formula for a bad mutual fund. Some are worse than others - and some are so bad that they have earned a "Strong Sell" on the Zacks Rank, the lowest ranking of the nearly 19,000 mutual funds we rank daily.
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.
Ascendant Deep Value Convertibles I : Expense ratio: 2.15%. Management fee: 1.15%. After expenses, the 5 year return is 0.07%, meaning your fees are far higher than the fund's returns.
Brandes International Small Cap Equity I (BISMX - Free Report) : BISMX is a Non US - Equity option, focusing their investments acoss emerging and developed markets, and can often extend across cap levels too. BISMX offers an expense ratio of 1.15% and annual returns of -0.65% over the last five years. Even if this fund can be positioned as a hedge during the recent bull-market, paying more in fees than returns over the long-term should never be an acceptable result.
Leader Short-Term Bond Fund C - 2.16% expense ratio, 0.75% management fee. LCMCX is an Investment Grade Bond - Short option; these funds focus on the short end of the curve, generally with bonds that mature in less than two years. LCMCX has generated annual returns of -0.75% over the last five years. Ouch!
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.
Neuberger Berman Real Estate Fund R6 (NRREX - Free Report) is a fund that has an expense ratio of 0.77%, and a management fee of 0.85%. NRREX 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 yearly returns of 11.04% over the last five years, this fund clearly wins.
MFS Mid-Cap Growth R6 (OTCKX - Free Report) is a stand out fund. OTCKX is a Mid Cap Growth mutual fund. These funds aim to target companies with a market capitalization between $2 billion and $10 billion that are also expected to exhibit more extensive growth opportunities for investors than their peers. With five-year annualized performance of 13.94% and expense ratio of 0.77%, this diversified fund is an attractive buy with a strong history of performance.
Diamond Hill Large Cap Fund Y (DHLYX - Free Report) : Expense ratio: 0.55%. Management fee: 0.5%. DHLYX 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. DHLYX has produced a 11.05% over the last five years.
Bottom Line
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.
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.