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3 Mutual Fund Misfires To Avoid In Your Retirement Portfolio - February 21, 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.
The easiest way to judge a mutual fund's quality over time is by analyzing its performance and fees. Our Zacks Rank of over 19,000 mutual funds has identified some of the worst of the worst mutual funds you should avoid, the funds with the highest fees and poorest long-term performance.
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.
Rational Dividend Capture Institutional (HDCTX - Free Report) : 1% expense ratio and 0.75% management fee. HDCTX is a Large Cap Value mutual fund, which invests in stocks with a market cap of $10 billion of more, but whose share prices do not reflect their intrinsic value. With a five year after-costs return of -1.2%, you're for the most part paying more in charges than returns.
Davis Government Bond A (RFBAX - Free Report) : 1.05% expense ratio, 0.3%. RFBAX is a Government Mortgage - Short fund, focusing on the mortgage-backed securities (MBS) market and securities that have less than three years until maturity. This fund has yearly returns of -0.16% over the most recent five years. Another fund liable of having investors pay more in charges than what they receive in return.
Rydex Energy Services Investor (RYVIX - Free Report) : Expense ratio: 1.47%. Management fee: 0.85%. RYVIX 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 -17.99%, 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.
Vanguard Dividend Growth Fund (VDIGX - Free Report) is a fund that has an expense ratio of 0.26%, and a management fee of 0.21%. VDIGX is a Large Cap Blend fund, targeting companies with market caps of over $10 billion. These funds offer investors a stability, and are perfect for people with a "buy and hold" mindset. With yearly returns of 11.43% over the last five years, this fund clearly wins.
Fidelity Pacific Basin (FPBFX - Free Report) : Expense ratio: 0.97%. Management fee: 0.73%. FPBFX is a Pacific Rim - Equity mutual fund; these funds typically invest in companies throughout the dominant export-focused markets of Hong Kong, Singapore, Taiwan, and Korea. FPBFX has managed to produce a robust 10.64% over the last five years.
Oppenheimer Discovery A (OPOCX - Free Report) is an attractive fund with a five-year annualized return of 11.39% and an expense ratio of just 1.08%. OPOCX is one of many Small Cap Growth mutual funds; these funds tend to create their portfolios around stocks with market capitalization of less than $2 billion.
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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3 Mutual Fund Misfires To Avoid In Your Retirement Portfolio - February 21, 2020
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.
The easiest way to judge a mutual fund's quality over time is by analyzing its performance and fees. Our Zacks Rank of over 19,000 mutual funds has identified some of the worst of the worst mutual funds you should avoid, the funds with the highest fees and poorest long-term performance.
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.
Rational Dividend Capture Institutional (HDCTX - Free Report) : 1% expense ratio and 0.75% management fee. HDCTX is a Large Cap Value mutual fund, which invests in stocks with a market cap of $10 billion of more, but whose share prices do not reflect their intrinsic value. With a five year after-costs return of -1.2%, you're for the most part paying more in charges than returns.
Davis Government Bond A (RFBAX - Free Report) : 1.05% expense ratio, 0.3%. RFBAX is a Government Mortgage - Short fund, focusing on the mortgage-backed securities (MBS) market and securities that have less than three years until maturity. This fund has yearly returns of -0.16% over the most recent five years. Another fund liable of having investors pay more in charges than what they receive in return.
Rydex Energy Services Investor (RYVIX - Free Report) : Expense ratio: 1.47%. Management fee: 0.85%. RYVIX 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 -17.99%, 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.
Vanguard Dividend Growth Fund (VDIGX - Free Report) is a fund that has an expense ratio of 0.26%, and a management fee of 0.21%. VDIGX is a Large Cap Blend fund, targeting companies with market caps of over $10 billion. These funds offer investors a stability, and are perfect for people with a "buy and hold" mindset. With yearly returns of 11.43% over the last five years, this fund clearly wins.
Fidelity Pacific Basin (FPBFX - Free Report) : Expense ratio: 0.97%. Management fee: 0.73%. FPBFX is a Pacific Rim - Equity mutual fund; these funds typically invest in companies throughout the dominant export-focused markets of Hong Kong, Singapore, Taiwan, and Korea. FPBFX has managed to produce a robust 10.64% over the last five years.
Oppenheimer Discovery A (OPOCX - Free Report) is an attractive fund with a five-year annualized return of 11.39% and an expense ratio of just 1.08%. OPOCX is one of many Small Cap Growth mutual funds; these funds tend to create their portfolios around stocks with market capitalization of less than $2 billion.
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.