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3 Mutual Fund Misfires To Avoid In Your Retirement Portfolio - December 18, 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.
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.
Catalyst Hedged Futures Strategy A : This fund has an expense ratio of 2.33% 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. HFXAX 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. The fund has lagged performance-wise, so perhaps a simpler index future investing strategy might be more effective.
Wells Fargo International Equity A (WFEAX - Free Report) : WFEAX is a Non US - Equity option, focusing their investments acoss emerging and developed markets, and can often extend across cap levels too. WFEAX offers an expense ratio of 1.4% and annual returns of 1.34% 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.
Brookfield Global Listed Infrastructure A (BGLAX - Free Report) - 1.35% expense ratio, 0.85% management fee. This fund has yielded yearly returns of 0.13% in the course of the last five years. Too bad!
3 Top Ranked Mutual Funds
Now that we've covered our "worst offender" list, let's take a look at some of Zacks' highest ranked mutual funds with some of the lowest fees you may want to consider.
Vanguard Global Minimum Volatility Fund Admiral (VMNVX - Free Report) : 0.15% expense ratio and 0.13% management fee. VMNVX is a Global - Equity mutual fund investing in bigger markets like the U.S., Europe, and Japan; these kinds of funds aren't limited by geography. With an annual return of 10.54% over the last five years, this fund is a winner.
Principal Blue Chip Fund A (PBLAX - Free Report) has an expense ratio of 1% and management fee of 0.66%. PBLAX is a Large Cap Growth mutual fund, and these funds invest in many large U.S. firms that are projected to grow at a faster rate than their large-cap peers. Thanks to yearly returns of 13.62% over the last five years, PBLAX is an effectively diversified fund with a long reputation of solidly positive performance.
T. Rowe Price Small Cap Stock Adviser (PASSX - Free Report) has an expense ratio of 1.14% and management fee of 0.74%. PASSX is a Small Cap Blend mutual fund, and usually targets stocks with market caps of less than $2 billion, letting investors diversify their funds among other kinds of small-cap equities. With annual returns of 11.38% over the last five years, this fund is a well-diversified fund with a long track record of success.
Bottom Line
These examples underscore the huge range in quality of mutual funds - from the really bad to the astonishingly good. There is no reason for your advisor to keep your money in any fund that charges more than you get in return (unless they're getting something out of it, like a high commission).
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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3 Mutual Fund Misfires To Avoid In Your Retirement Portfolio - December 18, 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.
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.
Catalyst Hedged Futures Strategy A : This fund has an expense ratio of 2.33% 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. HFXAX 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. The fund has lagged performance-wise, so perhaps a simpler index future investing strategy might be more effective.
Wells Fargo International Equity A (WFEAX - Free Report) : WFEAX is a Non US - Equity option, focusing their investments acoss emerging and developed markets, and can often extend across cap levels too. WFEAX offers an expense ratio of 1.4% and annual returns of 1.34% 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.
Brookfield Global Listed Infrastructure A (BGLAX - Free Report) - 1.35% expense ratio, 0.85% management fee. This fund has yielded yearly returns of 0.13% in the course of the last five years. Too bad!
3 Top Ranked Mutual Funds
Now that we've covered our "worst offender" list, let's take a look at some of Zacks' highest ranked mutual funds with some of the lowest fees you may want to consider.
Vanguard Global Minimum Volatility Fund Admiral (VMNVX - Free Report) : 0.15% expense ratio and 0.13% management fee. VMNVX is a Global - Equity mutual fund investing in bigger markets like the U.S., Europe, and Japan; these kinds of funds aren't limited by geography. With an annual return of 10.54% over the last five years, this fund is a winner.
Principal Blue Chip Fund A (PBLAX - Free Report) has an expense ratio of 1% and management fee of 0.66%. PBLAX is a Large Cap Growth mutual fund, and these funds invest in many large U.S. firms that are projected to grow at a faster rate than their large-cap peers. Thanks to yearly returns of 13.62% over the last five years, PBLAX is an effectively diversified fund with a long reputation of solidly positive performance.
T. Rowe Price Small Cap Stock Adviser (PASSX - Free Report) has an expense ratio of 1.14% and management fee of 0.74%. PASSX is a Small Cap Blend mutual fund, and usually targets stocks with market caps of less than $2 billion, letting investors diversify their funds among other kinds of small-cap equities. With annual returns of 11.38% over the last five years, this fund is a well-diversified fund with a long track record of success.
Bottom Line
These examples underscore the huge range in quality of mutual funds - from the really bad to the astonishingly good. There is no reason for your advisor to keep your money in any fund that charges more than you get in return (unless they're getting something out of it, like a high commission).
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.