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3 Mutual Fund Misfires To Avoid In Your Retirement Portfolio - December 26, 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.
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.
Wells Fargo Absolute Return Admiral (WARDX - Free Report) : 1.45% expense ratio and 0.72% management fee. WARDX is a part of the Allocation Balanced fund category; these funds like to invest in a variety of asset types, finding a balance between stocks, bonds, cash, and sometimes even precious metals and commodities; they are mostly categorized by their respective asset allocation. With a five year after-expenses return of 1.31%, you're mostly paying more in fees than returns.
Ashmore Emerging Markets Small Cap A (ESSAX - Free Report) . Expense ratio: 1.77%. Management fee: 0.72%. Over the last 5 years, this fund has generated annual returns of -0.84%.
Touchstone Ultra Short Duration Fixed Income I (TSDIX - Free Report) - 0.39% expense ratio, 0.25% management fee. This fund has yielded yearly returns of -0.28% in the course of the last five years. Too bad!
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 Large Cap Growth R6 (JLGMX - Free Report) is a fund that has an expense ratio of 0.43%, and a management fee of 0.45%. JLGMX 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 yearly returns of 14.47% over the last five years, this fund clearly wins.
MFS Mid-Cap Growth R6 (OTCKX - Free Report) is a stand out fund. OTCKX is a Mid Cap Growth mutual fund. These mutual funds choose companies with a stock market valuation between $2 billion and $10 billion. With five-year annualized performance of 13.94% and expense ratio of 0.74%, this diversified fund is an attractive buy with a strong history of performance.
Columbia Seligman Communications and Information R5 (SCMIX - Free Report) has an expense ratio of 0.95% and management fee of 0.87%. With a much more diversified approach, SCMIX--part of the Sector - Tech mutual fund category--gives investors a way to own a stake in the notoriously risky tech sector. With yearly returns of 17.6% over the last five years, this fund is well-diversified with a long reputation of salutary performance.
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 26, 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.
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.
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.
Wells Fargo Absolute Return Admiral (WARDX - Free Report) : 1.45% expense ratio and 0.72% management fee. WARDX is a part of the Allocation Balanced fund category; these funds like to invest in a variety of asset types, finding a balance between stocks, bonds, cash, and sometimes even precious metals and commodities; they are mostly categorized by their respective asset allocation. With a five year after-expenses return of 1.31%, you're mostly paying more in fees than returns.
Ashmore Emerging Markets Small Cap A (ESSAX - Free Report) . Expense ratio: 1.77%. Management fee: 0.72%. Over the last 5 years, this fund has generated annual returns of -0.84%.
Touchstone Ultra Short Duration Fixed Income I (TSDIX - Free Report) - 0.39% expense ratio, 0.25% management fee. This fund has yielded yearly returns of -0.28% in the course of the last five years. Too bad!
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 Large Cap Growth R6 (JLGMX - Free Report) is a fund that has an expense ratio of 0.43%, and a management fee of 0.45%. JLGMX 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 yearly returns of 14.47% over the last five years, this fund clearly wins.
MFS Mid-Cap Growth R6 (OTCKX - Free Report) is a stand out fund. OTCKX is a Mid Cap Growth mutual fund. These mutual funds choose companies with a stock market valuation between $2 billion and $10 billion. With five-year annualized performance of 13.94% and expense ratio of 0.74%, this diversified fund is an attractive buy with a strong history of performance.
Columbia Seligman Communications and Information R5 (SCMIX - Free Report) has an expense ratio of 0.95% and management fee of 0.87%. With a much more diversified approach, SCMIX--part of the Sector - Tech mutual fund category--gives investors a way to own a stake in the notoriously risky tech sector. With yearly returns of 17.6% over the last five years, this fund is well-diversified with a long reputation of salutary performance.
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.