Back to top

Image: Bigstock

Mutual Fund Misfires of the Market - January 14, 2020

Read MoreHide Full Article

If your financial advisor made you buy any of these "Mutual Fund Misfires of the Market" with high expenses and low returns, you need to reassess your advisor.

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.

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.

Eaton Vance Government Obligation R (ERGOX): 1.45% expense ratio and 0.65% management fee. ERGOX is part of the Government Mortgage - Short fund section. Government Mortgage - Short funds focus on the mortgage-backed security (MBS) market and securities that usually have less than three years until maturity. With a five year after-expenses return of 0.73%, you're mostly paying more in fees than returns.

Templeton Frontier Markets R6 (FFMRX): 1.64% expense ratio, 1.4% management fee. FFMRX is a part of the Non US - Equity fund category, many of which will focus across all cap levels, and will typically allocate their investments between emerging and developed markets. This fund has an annual returns of -7.29% over the last five years. Another fund guilty of having investors pay more in fees than returns.

Catalyst/SMH High Income A (HIIFX - Free Report) : Expense ratio: 1.47%. Management fee: 1%. HIIFX is a High Yield - Bonds option. These mutual funds are often known as junk bonds since they are below investment grade. This means they are at an elevated risk of default, at least when compared to their investment grade peers. With annual returns of just -0.58%, it's no surprise this fund has received Zacks' "Strong Sell" ranking.

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.

American Century NT Heritage Institutional (ACLWX): Expense ratio: 0.65%. Management fee: 0.65%. ACLWX is an All Cap Value mutual fund, which invests in small, medium, and large-cap companies, though they end up focusing on bigger firms due to percentage of assets. This fund has achieved five-year annual returns of an astounding 10.73%.

Victory Sycamore Established Value R6 (VEVRX) has an expense ratio of 0.58% and management fee of 0.45%. VEVRX is a Mid Cap Value mutual fund, which targets medium-sized companies with a market cap between $2 billion and $10 billion. With annual returns of 10.57% over the last five years, this is a well-diversified fund with a long track record of success.

JPMorgan Intrepid Growth Fund C (JCICX) has an expense ratio of 1.34% and management fee of 0.3%. JCICX 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 10.4% over the last five years, this fund is a well-diversified fund with a long track record of success.

Bottom Line

Along these lines, there you have it - if your financial guide has you put your money into any of our "Mutual Fund Misfires of the Market," there is a strong likelihood that they are either dormant at the worst possible time, inept, or (in all probability) filling their pockets with high fee commissions at the cost of your financial objectives.

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.

In-Depth Zacks Research for the Tickers Above

Normally $25 each - click below to receive one report FREE:

CatalystSMH High Income A (HIIFX) - free report >>

Published in