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3 Mutual Fund Misfires to Avoid - February 19, 2020
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If your financial advisor made you buy any of these "Mutual Fund Misfires of the Market" with high expenses and low returns, you need to reassess your 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.
Pacific Advisors Small Cap C : 6.14% expense ratio and 0.75% management fee. PGSCX is a Small Cap Value fund, and these funds are known for investing in companies with market caps under $2 billion. With a five year after-costs return of -2.07%, you're for the most part paying more in charges than returns.
AQR Equity Market Neutral R6 (QMNRX - Free Report) : 1.2% expense ratio, 1.1% management fee. QMNRX is a Market Neutral - Equity mutual fund. These portfolios usually hold 50% of their securities in a long position, as well as 50% in a short position. This fund has an annual returns of 0.69% over the last five years. Another fund guilty of having investors pay more in fees than returns.
Fidelity Advisor Strategy Real Return C (FCSRX - Free Report) : Expense ratio: 1.85%. Management fee: 0.55%. FCSRX 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 annual returns of just 1.16%, it's no surprise this fund has received Zacks' "Strong Sell" ranking.
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.
MFS Growth Fund R2 (MEGRX - Free Report) is a winner, with an expense ratio of just 1.16% and a five-year annualized return track record of 14.68%.
Fidelity Growth Strategies Fund (FDEGX - Free Report) has an expense ratio of 0.54% and management fee of 0.38%. FDEGX is an All Cap Growth mutual fund. In order to increase diversification, these funds have holdings across small, medium, and large-cap levels. Thanks to yearly returns of 10.35% over the last five years, FDEGX is an effectively diversified fund with a long reputation of solidly positive performance.
Federated MDT Allocation Cap Core I (QIACX - Free Report) : Expense ratio: 0.29%. Management fee: 0.7%. QIACX 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. QIACX has produced a 10.03% over the last five years.
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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3 Mutual Fund Misfires to Avoid - February 19, 2020
If your financial advisor made you buy any of these "Mutual Fund Misfires of the Market" with high expenses and low returns, you need to reassess your 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.
Pacific Advisors Small Cap C : 6.14% expense ratio and 0.75% management fee. PGSCX is a Small Cap Value fund, and these funds are known for investing in companies with market caps under $2 billion. With a five year after-costs return of -2.07%, you're for the most part paying more in charges than returns.
AQR Equity Market Neutral R6 (QMNRX - Free Report) : 1.2% expense ratio, 1.1% management fee. QMNRX is a Market Neutral - Equity mutual fund. These portfolios usually hold 50% of their securities in a long position, as well as 50% in a short position. This fund has an annual returns of 0.69% over the last five years. Another fund guilty of having investors pay more in fees than returns.
Fidelity Advisor Strategy Real Return C (FCSRX - Free Report) : Expense ratio: 1.85%. Management fee: 0.55%. FCSRX 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 annual returns of just 1.16%, it's no surprise this fund has received Zacks' "Strong Sell" ranking.
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.
MFS Growth Fund R2 (MEGRX - Free Report) is a winner, with an expense ratio of just 1.16% and a five-year annualized return track record of 14.68%.
Fidelity Growth Strategies Fund (FDEGX - Free Report) has an expense ratio of 0.54% and management fee of 0.38%. FDEGX is an All Cap Growth mutual fund. In order to increase diversification, these funds have holdings across small, medium, and large-cap levels. Thanks to yearly returns of 10.35% over the last five years, FDEGX is an effectively diversified fund with a long reputation of solidly positive performance.
Federated MDT Allocation Cap Core I (QIACX - Free Report) : Expense ratio: 0.29%. Management fee: 0.7%. QIACX 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. QIACX has produced a 10.03% over the last five years.
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.