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3 Mutual Fund Misfires to Avoid - January 09, 2020

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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.

High fees coupled with poor results: It's a straightforward equation for an awful mutual fund. Some are more regrettable than others - and some are bad to the point that they have got a "Strong Sell" from our Zacks Rank, the lowest positioning of the almost 19,000 mutual funds we rank every day.

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 International Equity A (WFEAX): 1.4% expense ratio and 0.85% management fee. WFEAX 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 1.34%, you're for the most part paying more in charges than returns.

First Eagle Fund of America A (FEFAX): FEFAX is categorized as an All Cap Value fund, and like the name suggests, invests across the cap spectrum in small-cap, mid-cap, and large-cap companies. FEFAX offers an expense ratio of 1.4% and annual returns of 1.14% 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.

Victory INCORE Low Duration Bond C (RLDCX - Free Report) - 1.62% expense ratio, 0.45% management fee. RLDCX is an Investment Grade Bond - Short fund that targets the short end of the curve by focusing on bonds that mature in less than two years. RLDCX has generated annual returns of 0.69% over the last five years. Ouch!

3 Top Ranked Mutual Funds

Since you've seen the most noticeably lowest Zacks Ranked mutual funds, how about we take a look at some of the top ranked mutual funds with the least fees.

Hartford Core Equity A (HAIAX) is a fund that has an expense ratio of 0.73%, and a management fee of 0.35%. HAIAX is a Large Cap Blend fund, targeting companies with market caps of over $10 billion. These funds offer investors a stability, and are perfect for people with a "buy and hold" mindset. With yearly returns of 10.78% over the last five years, this fund clearly wins.

Eagle Mid Cap Growth A (HAGAX) has an expense ratio of 1.05% and management fee of 0.52%. HAGAX is a Mid Cap Growth mutual fund. These mutual funds choose companies with a stock market valuation between $2 billion and $10 billion. With annual returns of 10.41% over the last five years, this is a well-diversified fund with a long track record of success.

Brown Advisory Growth Equity Investor (BIAGX): Expense ratio: 0.85%. Management fee: 0.59%. BIAGX 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. BIAGX has produced a 13.98% over the last five years.

Bottom Line

We hope that your investment advisor (if you use one) has you invested in one or all of the top-ranked mutual funds we've reviewed. But if that is not the case, and your advisor has you invested in any of the funds on our "worst offender" list, it might be time to have a conversation or reconsider this vitally important relationship.

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