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Mutual Fund Misfires of the Market - February 06, 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 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.

PSI Tactical Growth Fund A (FXTAX): This fund has an expense ratio of 1.9% and a management fee of 1%. Without even doing any in-depth analysis, just the fact that you are paying more in fees than you're earning in returns is reason enough not to invest. FXTAX is a part of the Allocation Balanced fund category; these funds like to invest in a variety of asset types, finding a balance between stocks, bonds, cash, and sometimes even precious metals and commodities; they are mostly categorized by their respective asset allocation. The fund has lagged performance-wise, so perhaps a simpler index future investing strategy might be more effective.

Hartford Global Real Asset A (HRLAX): 1.25% expense ratio, 0.85% management fee. HRLAX is a Global - Equity mutual fund, which invests their assets in large markets, leveraging the global economy. This fund has an annual returns of 0.63% over the last five years. Another fund guilty of having investors pay more in fees than returns.

Leader Total Return A : This fund has an expense ratio of 2.29% and management fee of 0.75%. LCATX is part of the Investment Grade Bond - Intermediate fund group. These mutual funds focus on the middle part of the curve, generally with bonds that usually mature in more than three years but less than 15 years. 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.

MFS Mass Investors Growth Stock R2 (MIRGX) is a winner, with an expense ratio of just 0.98% and a five-year annualized return track record of 13.7%.

MSIF International Advantage I (MFAIX) has an expense ratio of 0.98% and management fee of 0.8%. MFAIX is a Global - Equity mutual fund investing in bigger markets like the U.S., Europe, and Japan; these kinds of funds aren't limited by geography. Thanks to yearly returns of 15.07% over the last five years, MFAIX is an effectively diversified fund with a long reputation of solidly positive performance.

Hartford Stock HLS IB (HIBSX) is an attractive fund with a five-year annualized return of 11.35% and an expense ratio of just 0.77%. HIBSX is part of the Large Cap Blend section, and these mutual funds most often invest in firms with a market capitalization of $10 billion or more. By investing in bigger companies, these funds offer more stability, and are often well-suited for investors with a "buy and hold" mindset.

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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