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Mutual Fund Misfires of the Market - December 11, 2019

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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.

Lord Abbett Inflation Focused I (LIFIX): This fund has an expense ratio of 0.48% and a management fee of 0.3%. 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. LIFIX is a Government - Bonds fund, which holds securities issued by the U.S. federal government. This category stretches across the curve, meaning the yields and interest rate sensitivity will vary. The fund has lagged performance-wise, so perhaps a simpler index future investing strategy might be more effective.

CM Advisors Small Cap Value I (CMOVX): 1.25% expense ratio, 0.85%. CMOVX is a Small Cap Value fund, and these funds are known for investing in companies with market caps under $2 billion. This fund has yearly returns of -3.34% over the most recent five years. Another fund liable of having investors pay more in charges than what they receive in return.

MSIF Multi-Asset Fund L : This fund has an expense ratio of 1.92% and management fee of 0.85%. MMPLX 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 an annual average return of -4.82% 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.

City Natural Rochdale US Core Equity & Income N (CNRWX): Expense ratio: 1.03%. Management fee: 0.4%. CNRWX 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. This fund has achieved five-year annual returns of an astounding 11.28%.

Boston Trust SmMid Cap Fund (BTSMX) has an expense ratio of 0.75% and management fee of 0.75%. BTSMX is a Mid Cap Blend mutual fund, and usually features a portfolio with stocks of various styles and sizes, allowing for diversification within a strategy that focuses on mid cap companies. With annual returns of 10.91% over the last five years, this is a well-diversified fund with a long track record of success.

Conestoga Smid Cap Investor (CCSMX) has an expense ratio of 1.1% and management fee of 0.85%. CCSMX 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 yearly returns of 14.51% over the last five years, this fund is well-diversified with a long reputation of salutary performance.

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.

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