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3 Mutual Fund Misfires to Avoid - December 23, 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.
Below, you'll read about some of the funds included in our current list of "Mutual Fund Misfires of the Market." And if by chance you're invested in any of these misfires, we'll help and review some of our highest Zacks Ranked mutual funds.
3 Mutual Fund Misfires
Now, let's take a look at three market misfires.
Cutler Fixed Income Fund : 1.57% expense ratio and 0.5% management fee. CALFX is a Government Bond - Intermediate option. These type of funds hold securities issued by the U.S. federal government, and are seen as extremely low risk securities from a default perspective. With a five year after-costs return of 1.1%, you're for the most part paying more in charges than returns.
Invesco International Small Company A (IEGAX - Free Report) . Expense ratio: 1.58%. Management fee: 0.5%. Over the last 5 years, this fund has generated annual returns of 0.45%.
Causeway Global Absolute Return Investor : This fund has an expense ratio of 1.55% and management fee of 1.1%. CGAVX is a Market Neutral - Equity mutual fund. These portfolios usually hold 50% of their securities in a long position, as well as 50% in a short position. With an annual average return of -2.61% 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
Now that you've seen the worst Zacks Ranked mutual funds, let's have a look at some of the highest ranked funds with the lowest fees.
Baird Midcap Institutional (BMDIX - Free Report) : 0.81% expense ratio and 0.75% management fee. BMDIX is a Mid Cap Growth mutual fund. These mutual funds choose companies with a stock market valuation between $2 billion and $10 billion. With an annual return of 11.06% over the last five years, this fund is a winner.
Capital Group US Equity (CUSEX - Free Report) is a stand out fund. CUSEX 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. With five-year annualized performance of 10.61% and expense ratio of 0.43%, this diversified fund is an attractive buy with a strong history of performance.
Diamond Hill Large Cap Fund I (DHLRX - Free Report) : Expense ratio: 0.67%. Management fee: 0.5%. DHLRX 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. DHLRX has produced a 10.92% over the last five years.
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 - December 23, 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.
Below, you'll read about some of the funds included in our current list of "Mutual Fund Misfires of the Market." And if by chance you're invested in any of these misfires, we'll help and review some of our highest Zacks Ranked mutual funds.
3 Mutual Fund Misfires
Now, let's take a look at three market misfires.
Cutler Fixed Income Fund : 1.57% expense ratio and 0.5% management fee. CALFX is a Government Bond - Intermediate option. These type of funds hold securities issued by the U.S. federal government, and are seen as extremely low risk securities from a default perspective. With a five year after-costs return of 1.1%, you're for the most part paying more in charges than returns.
Invesco International Small Company A (IEGAX - Free Report) . Expense ratio: 1.58%. Management fee: 0.5%. Over the last 5 years, this fund has generated annual returns of 0.45%.
Causeway Global Absolute Return Investor : This fund has an expense ratio of 1.55% and management fee of 1.1%. CGAVX is a Market Neutral - Equity mutual fund. These portfolios usually hold 50% of their securities in a long position, as well as 50% in a short position. With an annual average return of -2.61% 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
Now that you've seen the worst Zacks Ranked mutual funds, let's have a look at some of the highest ranked funds with the lowest fees.
Baird Midcap Institutional (BMDIX - Free Report) : 0.81% expense ratio and 0.75% management fee. BMDIX is a Mid Cap Growth mutual fund. These mutual funds choose companies with a stock market valuation between $2 billion and $10 billion. With an annual return of 11.06% over the last five years, this fund is a winner.
Capital Group US Equity (CUSEX - Free Report) is a stand out fund. CUSEX 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. With five-year annualized performance of 10.61% and expense ratio of 0.43%, this diversified fund is an attractive buy with a strong history of performance.
Diamond Hill Large Cap Fund I (DHLRX - Free Report) : Expense ratio: 0.67%. Management fee: 0.5%. DHLRX 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. DHLRX has produced a 10.92% over the last five years.
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.