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Does Your Retirement Portfolio Hold These 3 Mutual Fund Misfires? - December 24, 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.

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.

Wells Fargo Short Duration Government A (MSDAX - Free Report) : This fund has an expense ratio of 0.8% and a management fee of 0.35%. 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. MSDAX is part of the Government Bond - Short fund category. Often seen as risk-free assets, these funds hold securities issued by the U.S. federal government and they focus on the short end of the curve. The fund has lagged performance-wise, so perhaps a simpler index future investing strategy might be more effective.

Janus Henderson Emerging Markets C (HEMCX - Free Report) : 2.16% expense ratio, 1% management fee. HEMCX is a part of the Non US - Equity fund category, many of which will focus across all cap levels, and will typically allocate their investments between emerging and developed markets. This fund has an annual returns of -0.38% over the last five years. Another fund guilty of having investors pay more in fees than returns.

Gabelli Focus Five Fund AAA (GWSVX - Free Report) : Expense ratio: 1.71%. Management fee: 1%. GWSVX is a Small Cap Value mutual fund option, which typically invest in companies with market caps under $2 billion. With annual returns of just -1.2%, it's no surprise this fund has received Zacks' "Strong Sell" ranking.

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.

JPMorgan Small Cap Growth L (JISGX - Free Report) : Expense ratio: 0.84%. Management fee: 0.65%. JISGX is a Small Cap Growth mutual fund and tends to feature small companies in up-and-coming industries and markets. This fund has achieved five-year annual returns of an astounding 13.97%.

Vanguard Tax-Managed Cap Appreciation Admiral (VTCLX - Free Report) is a stand out fund. VTCLX 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. With five-year annualized performance of 10.83% and expense ratio of 0.09%, this diversified fund is an attractive buy with a strong history of performance.

Hartford Mid Cap Fund HLS IA (HIMCX - Free Report) has an expense ratio of 0.7% and management fee of 0.66%. HIMCX 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 11.37% over the last five years, this fund is a well-diversified fund with a long track record of success.

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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