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.
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.
BlackRock Allocation Target Shares P (BATPX): 0.2% expense ratio and 0% management fee. BATPX 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 a five year after-expenses return of -2.36%, you're mostly paying more in fees than returns.
Brandes Global Equity C (BGVCX). Expense ratio: 2%. Management fee: 0%. Over the last 5 years, this fund has generated annual returns of 1.83%.
Timothy Plan Emerging Markets C - 3.33% expense ratio, 1.2% management fee. This fund has yielded yearly returns of -2.19% in the course of the last five years. Too bad!
3 Top Ranked Mutual Funds
There you have it: some prime examples of truly bad mutual funds. In contrast, here are a few funds that have achieved high Zacks Ranks and have low fees.
MSIF Global Quality Portfolio I (MGQIX) is a fund that has an expense ratio of 0.89%, and a management fee of 0.7%. MGQIX is a Global - Equity mutual fund, which invests their assets in large markets, leveraging the global economy. With yearly returns of 10.2% over the last five years, this fund clearly wins.
Neuberger Berman Mid Cap Growth R6 (NRMGX): Expense ratio: 0.61%. Management fee: 0.55%. NRMGX is a Mid Cap Growth mutual fund. These funds aim to target companies with a market capitalization between $2 billion and $10 billion that are also expected to exhibit more extensive growth opportunities for investors than their peers. NRMGX has managed to produce a robust 10.54% over the last five years.
JPMorgan Large Cap Growth R6 (JLGMX) has an expense ratio of 0.43% and management fee of 0.45%. JLGMX is a Large Cap Growth mutual fund, and these funds invest in many large U.S. firms that are projected to grow at a faster rate than their large-cap peers. With annual returns of 14.47% over the last five years, this fund is a well-diversified fund with a long track record of success.
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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