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Does Your Retirement Portfolio Hold These 3 Mutual Fund Misfires? - February 25, 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.
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.
Below, you'll read about some of the funds included in our current list of "Mutual Fund Misfires of the Market." And if by chance you're invested in any of these misfires, we'll help and review some of our highest Zacks Ranked mutual funds.
3 Mutual Fund Misfires
Now, let's take a look at three market misfires.
First Investor International Opportunities Bond Adviser : This fund has an expense ratio of 1.08% and a management fee of 0.75%. 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. FIODX is an International Bond - Developed fund, and these funds funds focus on fixed income securities from developed nations apart from the United States. This usually results in countries like Japan, Germany, the UK, France, and Australia dominating the list of top holdings. The fund has lagged performance-wise, so perhaps a simpler index future investing strategy might be more effective.
Touchstone Ultra Short Duration Fixed Income Y (TSYYX - Free Report) : 0.44% expense ratio, 0.25%. TSYYX 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. This fund has yearly returns of -0.19% over the most recent five years. Another fund liable of having investors pay more in charges than what they receive in return.
Transamerica Emerging Markets Equity A : Expense ratio: 1.57%. Management fee: 0.92%. AEMTX is a Non US - Equity option, focusing their investments acoss emerging and developed markets, and can often extend across cap levels too. With annual returns of just 1.4%, it's no surprise this fund has received Zacks' "Strong Sell" ranking.
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.
American Funds AMCAP R2E (RAEBX - Free Report) : Expense ratio: 1.15%. Management fee: 0.3%. RAEBX 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 10.21%.
Columbia Acorn European Adv (CLOFX - Free Report) has an expense ratio of 1.19% and management fee of 1.16%. CLOFX is a part of the Non US - Equity fund category, many of which will focus across all cap levels, and will typically allocate their investments between emerging and developed markets. With annual returns of 10.74% over the last five years, this is a well-diversified fund with a long track record of success.
Davenport Small Cap Focus Fund (DSCPX - Free Report) has an expense ratio of 0.96% and management fee of 0.75%. DSCPX is a Small Cap Blend mutual fund, and usually targets stocks with market caps of less than $2 billion, letting investors diversify their funds among other kinds of small-cap equities. With yearly returns of 10.67% over the last five years, this fund is well-diversified with a long reputation of salutary performance.
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.
Image: Bigstock
Does Your Retirement Portfolio Hold These 3 Mutual Fund Misfires? - February 25, 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.
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.
Below, you'll read about some of the funds included in our current list of "Mutual Fund Misfires of the Market." And if by chance you're invested in any of these misfires, we'll help and review some of our highest Zacks Ranked mutual funds.
3 Mutual Fund Misfires
Now, let's take a look at three market misfires.
First Investor International Opportunities Bond Adviser : This fund has an expense ratio of 1.08% and a management fee of 0.75%. 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. FIODX is an International Bond - Developed fund, and these funds funds focus on fixed income securities from developed nations apart from the United States. This usually results in countries like Japan, Germany, the UK, France, and Australia dominating the list of top holdings. The fund has lagged performance-wise, so perhaps a simpler index future investing strategy might be more effective.
Touchstone Ultra Short Duration Fixed Income Y (TSYYX - Free Report) : 0.44% expense ratio, 0.25%. TSYYX 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. This fund has yearly returns of -0.19% over the most recent five years. Another fund liable of having investors pay more in charges than what they receive in return.
Transamerica Emerging Markets Equity A : Expense ratio: 1.57%. Management fee: 0.92%. AEMTX is a Non US - Equity option, focusing their investments acoss emerging and developed markets, and can often extend across cap levels too. With annual returns of just 1.4%, it's no surprise this fund has received Zacks' "Strong Sell" ranking.
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.
American Funds AMCAP R2E (RAEBX - Free Report) : Expense ratio: 1.15%. Management fee: 0.3%. RAEBX 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 10.21%.
Columbia Acorn European Adv (CLOFX - Free Report) has an expense ratio of 1.19% and management fee of 1.16%. CLOFX is a part of the Non US - Equity fund category, many of which will focus across all cap levels, and will typically allocate their investments between emerging and developed markets. With annual returns of 10.74% over the last five years, this is a well-diversified fund with a long track record of success.
Davenport Small Cap Focus Fund (DSCPX - Free Report) has an expense ratio of 0.96% and management fee of 0.75%. DSCPX is a Small Cap Blend mutual fund, and usually targets stocks with market caps of less than $2 billion, letting investors diversify their funds among other kinds of small-cap equities. With yearly returns of 10.67% over the last five years, this fund is well-diversified with a long reputation of salutary performance.
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.