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Mutual Fund Misfires of the Market - January 10, 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.
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.
Sterling Capital Intermediate US Government C (BIUCX - Free Report) : 1.61% expense ratio and 0.32% management fee. BIUCX is categorized as a Government Bond - Intermediate fund. Holding securities issued by the U.S. federal government, Government Bond - Intermediate funds are often seen as risk-free assets and are described as extremely low-risk from a default perspective. With a five year after-costs return of 0.87%, you're for the most part paying more in charges than returns.
Wells Fargo Short Duration Government C (MSDCX - Free Report) . Expense ratio: 1.55%. Management fee: 0.32%. Over the last 5 years, this fund has generated annual returns of 0.28%.
Voya GNMA Income C (LEGNX - Free Report) : This fund has an expense ratio of 1.7% and management fee of 0.56%. LEGNX is a Government Mortgage - Intermediate mutual fund; these funds focus on the mortgage-backed securities (MBS) market and specifially, securities that have at least three years, but less than 10, to maturity. With an annual average return of 1.5% 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.
JPMorgan Small Cap Growth L (JISGX - Free Report) is a winner, with an expense ratio of just 0.84% and a five-year annualized return track record of 13.97%.
MFS Research R2 (MSRRX - Free Report) has an expense ratio of 1.06% and management fee of 0.43%. MSRRX 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 10.45% over the last five years, this is a well-diversified fund with a long track record of success.
Hartford Core Equity R3 (HGIRX - Free Report) has an expense ratio of 1.09% and management fee of 0.35%. HGIRX is part of the Large Cap Blend section, and these mutual funds most often invest in firms with a market capitalization of $10 billion or more. By investing in bigger companies, these funds offer more stability, and are often well-suited for investors with a "buy and hold" mindset. With annual returns of 11.6% over the last five years, this fund is a well-diversified fund with a long track record of success.
Bottom Line
So, there you have it - if your advisor has you invested in any of our "Mutual Fund Misfires of the Market," there is a good probability that they are either asleep at the wheel, incompetent, or (most likely) lining their pockets with high fee commissions at your financial expense.
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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Mutual Fund Misfires of the Market - January 10, 2020
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.
Sterling Capital Intermediate US Government C (BIUCX - Free Report) : 1.61% expense ratio and 0.32% management fee. BIUCX is categorized as a Government Bond - Intermediate fund. Holding securities issued by the U.S. federal government, Government Bond - Intermediate funds are often seen as risk-free assets and are described as extremely low-risk from a default perspective. With a five year after-costs return of 0.87%, you're for the most part paying more in charges than returns.
Wells Fargo Short Duration Government C (MSDCX - Free Report) . Expense ratio: 1.55%. Management fee: 0.32%. Over the last 5 years, this fund has generated annual returns of 0.28%.
Voya GNMA Income C (LEGNX - Free Report) : This fund has an expense ratio of 1.7% and management fee of 0.56%. LEGNX is a Government Mortgage - Intermediate mutual fund; these funds focus on the mortgage-backed securities (MBS) market and specifially, securities that have at least three years, but less than 10, to maturity. With an annual average return of 1.5% 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.
JPMorgan Small Cap Growth L (JISGX - Free Report) is a winner, with an expense ratio of just 0.84% and a five-year annualized return track record of 13.97%.
MFS Research R2 (MSRRX - Free Report) has an expense ratio of 1.06% and management fee of 0.43%. MSRRX 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 10.45% over the last five years, this is a well-diversified fund with a long track record of success.
Hartford Core Equity R3 (HGIRX - Free Report) has an expense ratio of 1.09% and management fee of 0.35%. HGIRX is part of the Large Cap Blend section, and these mutual funds most often invest in firms with a market capitalization of $10 billion or more. By investing in bigger companies, these funds offer more stability, and are often well-suited for investors with a "buy and hold" mindset. With annual returns of 11.6% over the last five years, this fund is a well-diversified fund with a long track record of success.
Bottom Line
So, there you have it - if your advisor has you invested in any of our "Mutual Fund Misfires of the Market," there is a good probability that they are either asleep at the wheel, incompetent, or (most likely) lining their pockets with high fee commissions at your financial expense.
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.