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3 Mutual Fund Misfires To Avoid In Your Retirement Portfolio - December 20, 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.

High fees plus poor performance: It's a pretty simple formula for a bad mutual fund. Some are worse than others - and some are so bad that they have earned a "Strong Sell" on the Zacks Rank, the lowest ranking of the nearly 19,000 mutual funds we rank daily.

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.

Goldman Sachs N-11 Equity Fund C (GSYCX): 2.47% expense ratio and 1.13% management fee. GSYCX is a Non US - Equity option, focusing their investments acoss emerging and developed markets, and can often extend across cap levels too. With a five year after-costs return of -6.36%, you're for the most part paying more in charges than returns.

Lord Abbett Inflation Focused C (LIFCX): LIFCX is classified as a Government - Bonds fund. These funds hold securities issued by the U.S. federal government in their portfolios, and focus across the curve, meaning the yields and interest rate sensitivity will vary. LIFCX offers an expense ratio of 1.33% and annual returns of -0.78% 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.

Oppenheimer SteelPath MLP Alpha C (MLPGX - Free Report) - 2.29% expense ratio, 1.1% management fee. MLPGX is a Sector - Energy mutual fund, which encompasses a wide range of vastly changing and vitally important industries throughout this massive global sector. MLPGX has generated annual returns of -8.06% 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.

Neuberger Berman Real Estate Fund Trust (NBRFX): 1.04% expense ratio and 1.2% management fee. NBRFX is categorized as a Sector - Real Estate mutual fund, which typically invests in various real estate investment trusts (REIT) due to their taxation rules. With an annual return of 10.76% over the last five years, this fund is a winner.

Transamerica Large Growth R4 (TGWFX) is a stand out fund. TGWFX 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 12.98% and expense ratio of 0.9%, this diversified fund is an attractive buy with a strong history of performance.

MFS Mid-Cap Growth Fund R4 (OTCJX) is an attractive fund with a five-year annualized return of 13.81% and an expense ratio of just 0.83%. OTCJX is a Mid Cap Growth mutual fund. These mutual funds choose companies with a stock market valuation between $2 billion and $10 billion.

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.

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