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Mutual Fund Misfires of the Market - December 09, 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.
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.
Goodwood SMID Cap Long/Short Institutional : This fund has an expense ratio of 1.35% and a management fee of 0.84%. 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. GAMIX is one of many Small Cap Growth mutual funds; these funds tend to create their portfolios around stocks with market capitalization of less than $2 billion. The fund has lagged performance-wise, so perhaps a simpler index future investing strategy might be more effective.
RBC Emerging Markets Small Cap Equity A : RSMAX is a Non US - Equity option, focusing their investments acoss emerging and developed markets, and can often extend across cap levels too. RSMAX offers an expense ratio of 1.7% and annual returns of -1.14% 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.
Thornburg Limited Term Municipal CA A (LTCAX - Free Report) : This fund has an expense ratio of 0.94% and management fee of 0.49%. LTCAX is a Muni - Bonds fund; these funds invest in debt securities issued by states and local municipalities, which are typically used to pay for infrastructure construction, schools, and other government functions. With an annual average return of 0.88% 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.
Nuveen Winslow Large-Cap Growth A (NWCAX - Free Report) is a winner, with an expense ratio of just 0.98% and a five-year annualized return track record of 11.08%.
Fidelity Fund has an expense ratio of 0.49% and management fee of 0.33%. FFIDX is classified as a Large Cap Blend fund. More often than not, Large Cap Blend mutual funds invest in companies with a market cap of over $10 billion. Buying stakes in bigger companies offer these funds more stability, and are well-suited for investors with a "buy and hold" mindset. With annual returns of 10.28% over the last five years, this is a well-diversified fund with a long track record of success.
Equinox EquityHedge US Strategy I is an attractive fund with a five-year annualized return of 10.72% and an expense ratio of just 0.99%. EEHIX is a Long Short - Equity fund, and these funds aim to minimize exposure to the broader market, taking long positions in equities that are expected to appreciate and short positions in equities that are projected to decline.
Bottom Line
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.
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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Mutual Fund Misfires of the Market - December 09, 2019
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.
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.
Goodwood SMID Cap Long/Short Institutional : This fund has an expense ratio of 1.35% and a management fee of 0.84%. 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. GAMIX is one of many Small Cap Growth mutual funds; these funds tend to create their portfolios around stocks with market capitalization of less than $2 billion. The fund has lagged performance-wise, so perhaps a simpler index future investing strategy might be more effective.
RBC Emerging Markets Small Cap Equity A : RSMAX is a Non US - Equity option, focusing their investments acoss emerging and developed markets, and can often extend across cap levels too. RSMAX offers an expense ratio of 1.7% and annual returns of -1.14% 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.
Thornburg Limited Term Municipal CA A (LTCAX - Free Report) : This fund has an expense ratio of 0.94% and management fee of 0.49%. LTCAX is a Muni - Bonds fund; these funds invest in debt securities issued by states and local municipalities, which are typically used to pay for infrastructure construction, schools, and other government functions. With an annual average return of 0.88% 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.
Nuveen Winslow Large-Cap Growth A (NWCAX - Free Report) is a winner, with an expense ratio of just 0.98% and a five-year annualized return track record of 11.08%.
Fidelity Fund has an expense ratio of 0.49% and management fee of 0.33%. FFIDX is classified as a Large Cap Blend fund. More often than not, Large Cap Blend mutual funds invest in companies with a market cap of over $10 billion. Buying stakes in bigger companies offer these funds more stability, and are well-suited for investors with a "buy and hold" mindset. With annual returns of 10.28% over the last five years, this is a well-diversified fund with a long track record of success.
Equinox EquityHedge US Strategy I is an attractive fund with a five-year annualized return of 10.72% and an expense ratio of just 0.99%. EEHIX is a Long Short - Equity fund, and these funds aim to minimize exposure to the broader market, taking long positions in equities that are expected to appreciate and short positions in equities that are projected to decline.
Bottom Line
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.
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.