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Mutual Fund Misfires of the Market - February 12, 2020

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You may need to start looking for a new financial advisor if your current one has put any of these high-fee, low-return "Mutual Fund Misfires of the Market" into your portfolio.

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.

Third Avenue Value Fund Institutional (TAVFX): This fund has an expense ratio of 1.15% and a management fee of 0.9%. 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. TAVFX is a Small Cap Value fund, and these funds are known for investing in companies with market caps under $2 billion. The fund has lagged performance-wise, so perhaps a simpler index future investing strategy might be more effective.

Franklin Real Return A (FRRAX). Expense ratio: 0.88%. Management fee: 0.9%. Over the last 5 years, this fund has generated annual returns of 0.08%.

Hotchkis and Wiley Mid-Cap Value I (HWMIX - Free Report) - 1% expense ratio, 0.75% management fee. This fund has yielded yearly returns of 0.77% in the course of the last five years. Too bad!

3 Top Ranked Mutual Funds

Now that we've covered our "worst offender" list, let's take a look at some of Zacks' highest ranked mutual funds with some of the lowest fees you may want to consider.

Principal Equity Income R4 (PEIPX) is a fund that has an expense ratio of 0.89%, and a management fee of 0.51%. PEIPX 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. With yearly returns of 10.07% over the last five years, this fund clearly wins.

JPMorgan Large Cap Growth R2 (JLGZX): Expense ratio: 1.18%. Management fee: 0.45%. JLGZX 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. JLGZX has managed to produce a robust 14.68% over the last five years.

Janus Henderson Global Technology I (JATIX) has an expense ratio of 0.76% and management fee of 0.64%. JATIX is a Sector - Tech mutual fund, allowing investors to own a stake in a notoriously volatile sector with a much more diversified approach. With annual returns of 20.4% over the last five years, this fund is a well-diversified fund with a long track record of success.

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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