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.
High fees coupled with poor results: It's a straightforward equation for an awful mutual fund. Some are more regrettable than others - and some are bad to the point that they have got a "Strong Sell" from our Zacks Rank, the lowest positioning of the almost 19,000 mutual funds we rank every day.
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.
Ivy Natural Resources I (IGNIX): Expense ratio: 1.1%. Management fee: 0.85%. After expenses, the 5 year return is -8.12%, meaning your fees are far higher than the fund's returns.
Commonwealth Africa Fund (CAFRX): 1.75% expense ratio, 0.75%. CAFRX is a part of the Non US - Equity fund category, many of which will focus across all cap levels, and will typically allocate their investments between emerging and developed markets. This fund has yearly returns of -4.62% over the most recent five years. Another fund liable of having investors pay more in charges than what they receive in return.
Day Hagan Tactical Allocation A : This fund has an expense ratio of 1.61% and management fee of 1%. DHAAX is a part of the Allocation Balanced fund category; these funds like to invest in a variety of asset types, finding a balance between stocks, bonds, cash, and sometimes even precious metals and commodities; they are mostly categorized by their respective asset allocation. With an annual average return of 0.05% 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
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.
Neuberger Berman Mid Cap Growth Investor (NMANX): Expense ratio: 0.9%. Management fee: 0.76%. NMANX 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. This fund has achieved five-year annual returns of an astounding 10.91%.
MainStay Large Cap Growth Investor (MLINX) is a stand out fund. MLINX is a part of the Large Cap Growth mutual fund category, which invest in many large U.S. companies that are expected to grow much faster compared to other large-cap stocks. With five-year annualized performance of 11.4% and expense ratio of 1.09%, this diversified fund is an attractive buy with a strong history of performance.
Janus Henderson Global Technology A (JATAX) has an expense ratio of 1.02% and management fee of 0.64%. With a much more diversified approach, JATAX--part of the Sector - Tech mutual fund category--gives investors a way to own a stake in the notoriously risky tech sector. With yearly returns of 17.24% over the last five years, this fund is well-diversified with a long reputation of salutary performance.
So, there you have it - if your advisor has you invested in any of our "Mutual Fund Misfires of the Market," there is a good probability that they are either asleep at the wheel, incompetent, or (most likely) lining their pockets with high fee commissions at your financial expense.
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