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Avoid 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.
MainStay Unconstrained Bond C (MSICX - Free Report) : 2.04% expense ratio and 0.57% management fee. MSICX is classified as a Diversified Bonds fund, which offers exposure to a wide variety of fixed income types, stretching across various issuers, credit levels, and maturities. With a five year after-expenses return of 1.84%, you're mostly paying more in fees than returns.
Ivy Corporate Bond B : 2.61% expense ratio, 0.47%. IBJBX is an Investment Grade Bond - Intermediate fund, which targets bonds that mature in more than three years but less than 15 years, and are a middle of the curve option for investors. This fund has yearly returns of 1.6% over the most recent five years. Another fund liable of having investors pay more in charges than what they receive in return.
Pacific Advisors Small Cap A : This fund has an expense ratio of 5.43% and management fee of 0.75%. PASMX is a Small Cap Value fund, and these funds are known for investing in companies with market caps under $2 billion. With an annual average return of -2.42% 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
Now that you've seen the worst Zacks Ranked mutual funds, let's have a look at some of the highest ranked funds with the lowest fees.
Dreyfus Fund (DREVX - Free Report) : Expense ratio: 0.72%. Management fee: 0.65%. DREVX 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. This fund has achieved five-year annual returns of an astounding 10.06%.
Fidelity Select Computers (FDCPX - Free Report) has an expense ratio of 0.76% and management fee of 0.54%. With a much more diversified approach, FDCPX--part of the Sector - Tech mutual fund category--gives investors a way to own a stake in the notoriously risky tech sector. With annual returns of 11.97% over the last five years, this is a well-diversified fund with a long track record of success.
Janus Henderson Enterprise D (JANEX - Free Report) has an expense ratio of 0.81% and management fee of 0.64%. JANEX 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 14.42% over the last five years, this fund is well-diversified with a long reputation of salutary performance.
Bottom Line
We hope that your investment advisor (if you use one) has you invested in one or all of the top-ranked mutual funds we've reviewed. But if that is not the case, and your advisor has you invested in any of the funds on our "worst offender" list, it might be time to have a conversation or reconsider this vitally important relationship.
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
Avoid 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.
MainStay Unconstrained Bond C (MSICX - Free Report) : 2.04% expense ratio and 0.57% management fee. MSICX is classified as a Diversified Bonds fund, which offers exposure to a wide variety of fixed income types, stretching across various issuers, credit levels, and maturities. With a five year after-expenses return of 1.84%, you're mostly paying more in fees than returns.
Ivy Corporate Bond B : 2.61% expense ratio, 0.47%. IBJBX is an Investment Grade Bond - Intermediate fund, which targets bonds that mature in more than three years but less than 15 years, and are a middle of the curve option for investors. This fund has yearly returns of 1.6% over the most recent five years. Another fund liable of having investors pay more in charges than what they receive in return.
Pacific Advisors Small Cap A : This fund has an expense ratio of 5.43% and management fee of 0.75%. PASMX is a Small Cap Value fund, and these funds are known for investing in companies with market caps under $2 billion. With an annual average return of -2.42% 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
Now that you've seen the worst Zacks Ranked mutual funds, let's have a look at some of the highest ranked funds with the lowest fees.
Dreyfus Fund (DREVX - Free Report) : Expense ratio: 0.72%. Management fee: 0.65%. DREVX 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. This fund has achieved five-year annual returns of an astounding 10.06%.
Fidelity Select Computers (FDCPX - Free Report) has an expense ratio of 0.76% and management fee of 0.54%. With a much more diversified approach, FDCPX--part of the Sector - Tech mutual fund category--gives investors a way to own a stake in the notoriously risky tech sector. With annual returns of 11.97% over the last five years, this is a well-diversified fund with a long track record of success.
Janus Henderson Enterprise D (JANEX - Free Report) has an expense ratio of 0.81% and management fee of 0.64%. JANEX 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 14.42% over the last five years, this fund is well-diversified with a long reputation of salutary performance.
Bottom Line
We hope that your investment advisor (if you use one) has you invested in one or all of the top-ranked mutual funds we've reviewed. But if that is not the case, and your advisor has you invested in any of the funds on our "worst offender" list, it might be time to have a conversation or reconsider this vitally important relationship.
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.