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Avoid These 3 Mutual Fund Misfires - February 05, 2020

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Does your current advisor have your money invested in these "Mutual Fund Misfires of the Market" that charge high fees for low returns? If so, it may be time for a new advisor.

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.

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.

Third Avenue Value Fund Investor (TVFVX - Free Report) : 1.4% expense ratio and 0.9% management fee. TVFVX is a Small Cap Value fund, and these funds are known for investing in companies with market caps under $2 billion. With a five year after-expenses return of -1.31%, you're mostly paying more in fees than returns.

Timothy Plan Defensive Strategy A (TPDAX - Free Report) : 1.41% expense ratio, 0.6% management fee. TPDAX 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 0.95% over the last five years. Another fund guilty of having investors pay more in fees than returns.

Eaton Vance Short Term Real Return C (ECRRX - Free Report) - 1.7% expense ratio, 0.33% management fee. ECRRX is classified as a Government - Bonds fund. These funds hold securities issued by the U.S. federal government in their portfolios, and focus across the curve, meaning the yields and interest rate sensitivity will vary. ECRRX has generated annual returns of 1.44% 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.

Neuberger Berman Mid Cap Growth R3 (NMGRX - Free Report) is a fund that has an expense ratio of 1.33%, and a management fee of 0.76%. NMGRX 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. With yearly returns of 10.34% over the last five years, this fund clearly wins.

American Century NT Growth Institutional has an expense ratio of 0.63% and management fee of 0.62%. ACLTX 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 14.19% over the last five years, ACLTX is an effectively diversified fund with a long reputation of solidly positive performance.

Principal Equity Income R5 (PEIQX - Free Report) is an attractive fund with a five-year annualized return of 10.2% and an expense ratio of just 0.77%. PEIQX is a part of the Large Cap Value category, and invests in equities with a market capitalization of $10 billion or more, but whose share prices do not reflect their intrinsic value.

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.

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