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 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.
Gabelli Focus Five Fund AAA (GWSVX): 1.71% expense ratio and 1% management fee. GWSVX is a Small Cap Value mutual fund option, which typically invest in companies with market caps under $2 billion. With a five year after-costs return of -1.2%, you're for the most part paying more in charges than returns.
Saratoga Energy & Basic Materials I (SEPIX): 3% expense ratio, 1.25%. SEPIX is classified as a Sector - Energy mutual fund. Throughout the massive global energy sector, these funds hold a wide range of quickly changing and vitally important industries. This fund has yearly returns of -8.89% over the most recent five years. Another fund liable of having investors pay more in charges than what they receive in return.
Pacific Advisors Mid Cap Value C - 7.4% expense ratio, 1% management fee. PMVCX 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. PMVCX has generated annual returns of -4.26% 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.
AB Small Cap Growth K (QUAKX): Expense ratio: 1.09%. Management fee: 0.75%. QUAKX is one of many Small Cap Growth mutual funds; these funds tend to create their portfolios around stocks with market capitalization of less than $2 billion. This fund has achieved five-year annual returns of an astounding 11.78%.
Principal Large Cap Growth I R4 (PPUSX) has an expense ratio of 0.97% and management fee of 0.6%. PPUSX 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. Thanks to yearly returns of 11.17% over the last five years, PPUSX is an effectively diversified fund with a long reputation of solidly positive performance.
Janus Henderson Global Technology Institutional (JGLTX): Expense ratio: 0.75%. Management fee: 0.64%. With a much more diversified approach, JGLTX--part of the Sector - Tech mutual fund category--gives investors a way to own a stake in the notoriously risky tech sector. JGLTX has produced a 19.14% over the last five years.
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.
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