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Does Your Retirement Portfolio Hold These 3 Mutual Fund Misfires? - January 31, 2020

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If your advisor has you invested in any of these "Mutual Fund Misfires of the Market" with high fees and low returns, you need to rethink your advisor.

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.

Northeast Investors Trust (NTHEX): 1.55% expense ratio and 0.5% management fee. NTHEX 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 a five year after-costs return of -0.51%, you're for the most part paying more in charges than returns.

AB Allocation Market Real Return K (AMTKX): 1.27% expense ratio, 0.75% management fee. AMTKX is an Allocation Balanced mutual fund. Allocation Balanced funds look to invest across asset types, like stocks, bonds, and cash, and including precious metals or commodities is not unusual; these funds are mostly categorized by their respective asset allocation. This fund has an annual returns of 0.8% over the last five years. Another fund guilty of having investors pay more in fees than returns.

Thornburg Limited Term Municipal CA A (LTCAX - Free Report) : This fund has an expense ratio of 0.93% and management fee of 0.49%. LTCAX is a Muni - Bonds mutual fund; these funds invest in debt securities issued by states and local municipalities, which are typically used to pay for infrastructure construction, schools, and other government functions. With an annual average return of 0.91% 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

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.

Principal Capital Appreciation R2 (PCANX) is a fund that has an expense ratio of 1.24%, and a management fee of 0.47%. PCANX 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 10.9% over the last five years, this fund clearly wins.

Janus Henderson Research T (JAMRX): Expense ratio: 0.77%. Management fee: 0.56%. JAMRX is a part of the Large Cap Growth mutual fund category, which invest in many large U.S. companies that are expected to grow much faster compared to other large-cap stocks. JAMRX has managed to produce a robust 12.1% over the last five years.

Artisan Global Equity Investor (ARTHX): Expense ratio: 1.38%. Management fee: 1%. ARTHX is a Global - Equity mutual fund. These funds invest in large markets like the U.S., Europe, and Japan, and operate with very few geographical limitations. ARTHX has produced a 10.55% over the last five years.

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.

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Thornburg Ltd Term MuniCA A (LTCAX) - free report >>

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