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Avoid These 3 Mutual Fund Misfires - February 20, 2020
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If your advisor has you invested in any of these "Mutual Fund Misfires of the Market" with high fees and low returns, you need to rethink 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.
Forester Discovery Fund : 1.35% expense ratio and 1% management fee. INTLX is a Global - Equity mutual fund. These funds invest in large markets like the U.S., Europe, and Japan, and operate with very few geographical limitations. With a five year after-expenses return of -0.1%, you're mostly paying more in fees than returns.
AB Short Duration A : ADPAX is a Government Bond - Short fund, and these funds hold securities issued by the U.S. federal government. This category focuses on the short end of the curve, and are seen as extremely low risk securities from a default perspective. ADPAX offers an expense ratio of 0.97% and annual returns of 0.08% over the last five years. Even if this fund can be positioned as a hedge during the recent bull-market, paying more in fees than returns over the long-term should never be an acceptable result.
Oppenheimer SteelPath MLP Alph Plus C (MLPMX - Free Report) : Expense ratio: 3.55%. Management fee: 1.25%. MLPMX is classified as a Sector - Energy mutual fund. Throughout the massive global energy sector, these funds hold a wide range of quickly changing and vitally important industries. With annual returns of just -10.2%, it's no surprise this fund has received Zacks' "Strong Sell" ranking.
3 Top Ranked Mutual Funds
Since you've seen the most noticeably lowest Zacks Ranked mutual funds, how about we take a look at some of the top ranked mutual funds with the least fees.
Fidelity Select Electronics (FSELX - Free Report) : Expense ratio: 0.73%. Management fee: 0.54%. FSELX is a Sector - Tech mutual fund, allowing investors to own a stake in a notoriously volatile sector with a much more diversified approach. This fund has achieved five-year annual returns of an astounding 20.21%.
Janus Henderson Enterprise I (JMGRX - Free Report) is a stand out fund. JMGRX is a Mid Cap Growth mutual fund. Mid Cap Growth funds pick stocks--usually companies with a market cap between $2 billion and $10 billion--that demonstrate extensive growth opportunities for investors compared to their peers. With five-year annualized performance of 14.49% and expense ratio of 0.75%, this diversified fund is an attractive buy with a strong history of performance.
Oppenheimer Gold & Special Mineral A (OPGSX - Free Report) is an attractive fund with a five-year annualized return of 10.05% and an expense ratio of just 1.17%. OPGSX is classified as a Sector - Precious Metal fund, and these mutual funds invest in stocks with a focus on the mining and production of precious metals like gold, silver, platinum, and palladium.
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.
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Avoid These 3 Mutual Fund Misfires - February 20, 2020
If your advisor has you invested in any of these "Mutual Fund Misfires of the Market" with high fees and low returns, you need to rethink 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.
Forester Discovery Fund : 1.35% expense ratio and 1% management fee. INTLX is a Global - Equity mutual fund. These funds invest in large markets like the U.S., Europe, and Japan, and operate with very few geographical limitations. With a five year after-expenses return of -0.1%, you're mostly paying more in fees than returns.
AB Short Duration A : ADPAX is a Government Bond - Short fund, and these funds hold securities issued by the U.S. federal government. This category focuses on the short end of the curve, and are seen as extremely low risk securities from a default perspective. ADPAX offers an expense ratio of 0.97% and annual returns of 0.08% over the last five years. Even if this fund can be positioned as a hedge during the recent bull-market, paying more in fees than returns over the long-term should never be an acceptable result.
Oppenheimer SteelPath MLP Alph Plus C (MLPMX - Free Report) : Expense ratio: 3.55%. Management fee: 1.25%. MLPMX is classified as a Sector - Energy mutual fund. Throughout the massive global energy sector, these funds hold a wide range of quickly changing and vitally important industries. With annual returns of just -10.2%, it's no surprise this fund has received Zacks' "Strong Sell" ranking.
3 Top Ranked Mutual Funds
Since you've seen the most noticeably lowest Zacks Ranked mutual funds, how about we take a look at some of the top ranked mutual funds with the least fees.
Fidelity Select Electronics (FSELX - Free Report) : Expense ratio: 0.73%. Management fee: 0.54%. FSELX is a Sector - Tech mutual fund, allowing investors to own a stake in a notoriously volatile sector with a much more diversified approach. This fund has achieved five-year annual returns of an astounding 20.21%.
Janus Henderson Enterprise I (JMGRX - Free Report) is a stand out fund. JMGRX is a Mid Cap Growth mutual fund. Mid Cap Growth funds pick stocks--usually companies with a market cap between $2 billion and $10 billion--that demonstrate extensive growth opportunities for investors compared to their peers. With five-year annualized performance of 14.49% and expense ratio of 0.75%, this diversified fund is an attractive buy with a strong history of performance.
Oppenheimer Gold & Special Mineral A (OPGSX - Free Report) is an attractive fund with a five-year annualized return of 10.05% and an expense ratio of just 1.17%. OPGSX is classified as a Sector - Precious Metal fund, and these mutual funds invest in stocks with a focus on the mining and production of precious metals like gold, silver, platinum, and palladium.
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.