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Does Your Retirement Portfolio Hold These 3 Mutual Fund Misfires? - December 30, 2019
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If your advisor has you invested in any of these "Mutual Fund Misfires of the Market" with high fees and low returns, you need to rethink 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.
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/SMH High Income I (HIIIX - Free Report) : This fund has an expense ratio of 1.22% and a management fee of 1%. 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. HIIIX is classifed as a High Yield - Bonds fund; these funds come in below investment grade, and are referred to as junk bonds for this reason. The fund has lagged performance-wise, so perhaps a simpler index future investing strategy might be more effective.
Templeton Frontier Markets Adviser . Expense ratio: 1.71%. Management fee: 1%. Over the last 5 years, this fund has generated annual returns of -7.5%.
AQR Multi Strategy Alternative R6 : Expense ratio: 1.87%. Management fee: 1.75%. QSARX is classified as an Allocation Balanced fund, which seeks to invest in a balance of asset types, like stocks, bonds, and cash, and including precious metals or commodities is not unusual. With annual returns of just -1.04%, 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.
Hartford Core Equity Y (HGIYX - Free Report) is a winner, with an expense ratio of just 0.42% and a five-year annualized return track record of 12.33%.
Jensen Quality Growth Fund R (JENRX - Free Report) has an expense ratio of 1.24% and management fee of 0.49%. JENRX 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 annual returns of 12.84% over the last five years, this is a well-diversified fund with a long track record of success.
MFS Mid-Cap Growth Fund I (OTCIX - Free Report) is an attractive fund with a five-year annualized return of 13.82% and an expense ratio of just 0.83%. OTCIX 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
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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Does Your Retirement Portfolio Hold These 3 Mutual Fund Misfires? - December 30, 2019
If your advisor has you invested in any of these "Mutual Fund Misfires of the Market" with high fees and low returns, you need to rethink 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.
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/SMH High Income I (HIIIX - Free Report) : This fund has an expense ratio of 1.22% and a management fee of 1%. 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. HIIIX is classifed as a High Yield - Bonds fund; these funds come in below investment grade, and are referred to as junk bonds for this reason. The fund has lagged performance-wise, so perhaps a simpler index future investing strategy might be more effective.
Templeton Frontier Markets Adviser . Expense ratio: 1.71%. Management fee: 1%. Over the last 5 years, this fund has generated annual returns of -7.5%.
AQR Multi Strategy Alternative R6 : Expense ratio: 1.87%. Management fee: 1.75%. QSARX is classified as an Allocation Balanced fund, which seeks to invest in a balance of asset types, like stocks, bonds, and cash, and including precious metals or commodities is not unusual. With annual returns of just -1.04%, 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.
Hartford Core Equity Y (HGIYX - Free Report) is a winner, with an expense ratio of just 0.42% and a five-year annualized return track record of 12.33%.
Jensen Quality Growth Fund R (JENRX - Free Report) has an expense ratio of 1.24% and management fee of 0.49%. JENRX 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 annual returns of 12.84% over the last five years, this is a well-diversified fund with a long track record of success.
MFS Mid-Cap Growth Fund I (OTCIX - Free Report) is an attractive fund with a five-year annualized return of 13.82% and an expense ratio of just 0.83%. OTCIX 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
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.