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Does Your Retirement Portfolio Hold These 3 Mutual Fund Misfires? - February 18, 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.
First, let's break down some of the funds currently part of our "Mutual Fund Misfires of the Market." If you happen to have put your money into any of these misfires, we'll help assess some of our best Zacks Ranked mutual funds.
3 Mutual Fund Misfires
Now, let's take a look at three market misfires.
Oppenheimer Limited Term Government C : This fund has an expense ratio of 1.6% and a management fee of 0.42%. 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. OLTCX is part of the Government Bond - Short fund category. Often seen as risk-free assets, these funds hold securities issued by the U.S. federal government and they focus on the short end of the curve. The fund has lagged performance-wise, so perhaps a simpler index future investing strategy might be more effective.
ICON International Equity Fund S : 1.55% expense ratio, 1%. ICNEX is a Non US - Equity fund. Many of these funds like to allocate across emerging and developed markets, and will often focus on all cap levels. This fund has yearly returns of 1.45% over the most recent five years. Another fund liable of having investors pay more in charges than what they receive in return.
Davis Government Bond C (DGVCX - Free Report) - 1.8% expense ratio, 0.3% management fee. This fund has yielded yearly returns of 0.05% in the course of the last five years. Too bad!
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.
Franklin DynaTech A (FKDNX - Free Report) : Expense ratio: 0.85%. Management fee: 0.46%. With a much more diversified approach, FKDNX--part of the Sector - Tech mutual fund category--gives investors a way to own a stake in the notoriously risky tech sector. This fund has achieved five-year annual returns of an astounding 15.25%.
Fidelity Growth Company (FDGRX - Free Report) is a stand out fund. FDGRX 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. With five-year annualized performance of 15.61% and expense ratio of 0.85%, this diversified fund is an attractive buy with a strong history of performance.
Dreyfus Appreciation Fund (DGAGX - Free Report) has an expense ratio of 0.9% and management fee of 0.55%. DGAGX 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. With yearly returns of 10.87% over the last five years, this fund is well-diversified with a long reputation of salutary performance.
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.
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.
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Does Your Retirement Portfolio Hold These 3 Mutual Fund Misfires? - February 18, 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.
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.
First, let's break down some of the funds currently part of our "Mutual Fund Misfires of the Market." If you happen to have put your money into any of these misfires, we'll help assess some of our best Zacks Ranked mutual funds.
3 Mutual Fund Misfires
Now, let's take a look at three market misfires.
Oppenheimer Limited Term Government C : This fund has an expense ratio of 1.6% and a management fee of 0.42%. 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. OLTCX is part of the Government Bond - Short fund category. Often seen as risk-free assets, these funds hold securities issued by the U.S. federal government and they focus on the short end of the curve. The fund has lagged performance-wise, so perhaps a simpler index future investing strategy might be more effective.
ICON International Equity Fund S : 1.55% expense ratio, 1%. ICNEX is a Non US - Equity fund. Many of these funds like to allocate across emerging and developed markets, and will often focus on all cap levels. This fund has yearly returns of 1.45% over the most recent five years. Another fund liable of having investors pay more in charges than what they receive in return.
Davis Government Bond C (DGVCX - Free Report) - 1.8% expense ratio, 0.3% management fee. This fund has yielded yearly returns of 0.05% in the course of the last five years. Too bad!
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.
Franklin DynaTech A (FKDNX - Free Report) : Expense ratio: 0.85%. Management fee: 0.46%. With a much more diversified approach, FKDNX--part of the Sector - Tech mutual fund category--gives investors a way to own a stake in the notoriously risky tech sector. This fund has achieved five-year annual returns of an astounding 15.25%.
Fidelity Growth Company (FDGRX - Free Report) is a stand out fund. FDGRX 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. With five-year annualized performance of 15.61% and expense ratio of 0.85%, this diversified fund is an attractive buy with a strong history of performance.
Dreyfus Appreciation Fund (DGAGX - Free Report) has an expense ratio of 0.9% and management fee of 0.55%. DGAGX 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. With yearly returns of 10.87% over the last five years, this fund is well-diversified with a long reputation of salutary performance.
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.
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.