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3 Mutual Fund Misfires to Avoid - February 10, 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.
The easiest way to judge a mutual fund's quality over time is by analyzing its performance and fees. Our Zacks Rank of over 19,000 mutual funds has identified some of the worst of the worst mutual funds you should avoid, the funds with the highest fees and poorest long-term performance.
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.
The Texas I (BIGTX - Free Report) : Expense ratio: 1.64%. Management fee: 1.45%. After expenses, the 5 year return is 1.14%, meaning your fees are far higher than the fund's returns.
MainGate MLP Fund A (AMLPX - Free Report) . Expense ratio: 1.7%. Management fee: 1.45%. Over the last 5 years, this fund has generated annual returns of -8.65%.
AQR Multi Strategy Alternative R6 : This fund has an expense ratio of 1.87% and management fee of 1.75%. QSARX is classified as an Allocation Balanced fund, which seeks to invest in a balance of asset types, like stocks, bonds, and cash, and including precious metals or commodities is not unusual. With an annual average return of -2.57% 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
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.
JPMorgan Growth Advantage R6 (JGVVX - Free Report) : Expense ratio: 0.64%. Management fee: 0.55%. JGVVX 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. This fund has achieved five-year annual returns of an astounding 15.24%.
Dreyfus/Boston Small/Mid-Cap Growth Y (DBMYX - Free Report) : Expense ratio: 0.64%. Management fee: 0.6%. DBMYX 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. DBMYX has managed to produce a robust 13.55% over the last five years.
Franklin DynaTech R6 (FDTRX - Free Report) : Expense ratio: 0.49%. Management fee: 0.46%. FDTRX is part of the Sector - Tech mutual fund category that invests in technology and lets investors own a stake in a notoriously volatile sector, but with a much more diversified approach. FDTRX has produced a 16.95% over the last five years.
Bottom Line
These examples underscore the huge range in quality of mutual funds - from the really bad to the astonishingly good. There is no reason for your advisor to keep your money in any fund that charges more than you get in return (unless they're getting something out of it, like a high commission).
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.
Image: Bigstock
3 Mutual Fund Misfires to Avoid - February 10, 2020
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.
The easiest way to judge a mutual fund's quality over time is by analyzing its performance and fees. Our Zacks Rank of over 19,000 mutual funds has identified some of the worst of the worst mutual funds you should avoid, the funds with the highest fees and poorest long-term performance.
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.
The Texas I (BIGTX - Free Report) : Expense ratio: 1.64%. Management fee: 1.45%. After expenses, the 5 year return is 1.14%, meaning your fees are far higher than the fund's returns.
MainGate MLP Fund A (AMLPX - Free Report) . Expense ratio: 1.7%. Management fee: 1.45%. Over the last 5 years, this fund has generated annual returns of -8.65%.
AQR Multi Strategy Alternative R6 : This fund has an expense ratio of 1.87% and management fee of 1.75%. QSARX is classified as an Allocation Balanced fund, which seeks to invest in a balance of asset types, like stocks, bonds, and cash, and including precious metals or commodities is not unusual. With an annual average return of -2.57% 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
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.
JPMorgan Growth Advantage R6 (JGVVX - Free Report) : Expense ratio: 0.64%. Management fee: 0.55%. JGVVX 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. This fund has achieved five-year annual returns of an astounding 15.24%.
Dreyfus/Boston Small/Mid-Cap Growth Y (DBMYX - Free Report) : Expense ratio: 0.64%. Management fee: 0.6%. DBMYX 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. DBMYX has managed to produce a robust 13.55% over the last five years.
Franklin DynaTech R6 (FDTRX - Free Report) : Expense ratio: 0.49%. Management fee: 0.46%. FDTRX is part of the Sector - Tech mutual fund category that invests in technology and lets investors own a stake in a notoriously volatile sector, but with a much more diversified approach. FDTRX has produced a 16.95% over the last five years.
Bottom Line
These examples underscore the huge range in quality of mutual funds - from the really bad to the astonishingly good. There is no reason for your advisor to keep your money in any fund that charges more than you get in return (unless they're getting something out of it, like a high commission).
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.