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Does Your Retirement Portfolio Hold These 3 Mutual Fund Misfires? - December 13, 2019
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Does your current advisor have your money invested in these "Mutual Fund Misfires of the Market" that charge high fees for low returns? If so, it may be time for a new advisor.
How can you tell a good mutual fund from a bad one? It's pretty basic: If the fund has high fees and performs poorly, it's not good. Of course, there's a range - but when a mutual fund earns a Zacks Rank of #5 (Strong Sell) that means it's among the worst of roughly 19,000 funds we rate each day.
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.
AQR Multi Strategy Alternative R6 : This fund has an expense ratio of 1.87% and a management fee of 1.75%. 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. QSARX 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. The fund has lagged performance-wise, so perhaps a simpler index future investing strategy might be more effective.
Oppenheimer SteelPath MLP Alpha I (OSPAX - Free Report) . Expense ratio: 1.23%. Management fee: 1.75%. Over the last 5 years, this fund has generated annual returns of -7.16%.
The Texas I (BIGTX - Free Report) - 1.64% expense ratio, 1.45% management fee. BIGTX is a Mid Cap Blend mutual fund that typically features a portfolio filled with stocks of various sizes and styles; it allows for a diversification strategy focusing on companies with market caps between $2 billion and $10 billion. BIGTX has generated annual returns of -0.11% over the last five years. Ouch!
3 Top Ranked Mutual Funds
There you have it: some prime examples of truly bad mutual funds. In contrast, here are a few funds that have achieved high Zacks Ranks and have low fees.
MFS Mid-Cap Growth Fund I (OTCIX - Free Report) : 0.83% expense ratio and 0.71% management fee. OTCIX 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 an annual return of 13.82% over the last five years, this fund is a winner.
MainStay Large Cap Growth R6 (MLRSX - Free Report) has an expense ratio of 0.64% and management fee of 0.62%. MLRSX 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. Thanks to yearly returns of 13.07% over the last five years, MLRSX is an effectively diversified fund with a long reputation of solidly positive performance.
AMG Frontier Small Cap Growth I (MSSCX - Free Report) is an attractive fund with a five-year annualized return of 10.05% and an expense ratio of just 0.96%. MSSCX 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.
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.
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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Does Your Retirement Portfolio Hold These 3 Mutual Fund Misfires? - December 13, 2019
Does your current advisor have your money invested in these "Mutual Fund Misfires of the Market" that charge high fees for low returns? If so, it may be time for a new advisor.
How can you tell a good mutual fund from a bad one? It's pretty basic: If the fund has high fees and performs poorly, it's not good. Of course, there's a range - but when a mutual fund earns a Zacks Rank of #5 (Strong Sell) that means it's among the worst of roughly 19,000 funds we rate each day.
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.
AQR Multi Strategy Alternative R6 : This fund has an expense ratio of 1.87% and a management fee of 1.75%. 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. QSARX 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. The fund has lagged performance-wise, so perhaps a simpler index future investing strategy might be more effective.
Oppenheimer SteelPath MLP Alpha I (OSPAX - Free Report) . Expense ratio: 1.23%. Management fee: 1.75%. Over the last 5 years, this fund has generated annual returns of -7.16%.
The Texas I (BIGTX - Free Report) - 1.64% expense ratio, 1.45% management fee. BIGTX is a Mid Cap Blend mutual fund that typically features a portfolio filled with stocks of various sizes and styles; it allows for a diversification strategy focusing on companies with market caps between $2 billion and $10 billion. BIGTX has generated annual returns of -0.11% over the last five years. Ouch!
3 Top Ranked Mutual Funds
There you have it: some prime examples of truly bad mutual funds. In contrast, here are a few funds that have achieved high Zacks Ranks and have low fees.
MFS Mid-Cap Growth Fund I (OTCIX - Free Report) : 0.83% expense ratio and 0.71% management fee. OTCIX 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 an annual return of 13.82% over the last five years, this fund is a winner.
MainStay Large Cap Growth R6 (MLRSX - Free Report) has an expense ratio of 0.64% and management fee of 0.62%. MLRSX 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. Thanks to yearly returns of 13.07% over the last five years, MLRSX is an effectively diversified fund with a long reputation of solidly positive performance.
AMG Frontier Small Cap Growth I (MSSCX - Free Report) is an attractive fund with a five-year annualized return of 10.05% and an expense ratio of just 0.96%. MSSCX 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.
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.
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.