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3 Mutual Fund Misfires to Avoid - February 26, 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.
Wells Fargo Short Duration Government A (MSDAX - Free Report) : 0.81% expense ratio and 0.35% management fee. MSDAX is a Government Bond - Short fund option. These funds hold securities issued by the U.S. federal government in their portfolios, and focus on the short end of the curve, which results in lower yields. With a five year after-costs return of 0.66%, you're for the most part paying more in charges than returns.
Ivy Natural Resources Y (IGNYX - Free Report) . Expense ratio: 1.44%. Management fee: 0.35%. Over the last 5 years, this fund has generated annual returns of -3.53%.
Gabelli Focus Five Fund AAA (GWSVX - Free Report) : This fund has an expense ratio of 1.64% and management fee of 1%. GWSVX 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 -0.45% 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
There you have it: some prime examples of truly bad mutual funds. In contrast, here are a few funds that have achieved high Zacks Ranks and have low fees.
Diamond Hill Large Cap Fund Y (DHLYX - Free Report) : 0.55% expense ratio and 0.5% management fee. DHLYX is classified as a Large Cap Blend fund. More often than not, Large Cap Blend mutual funds invest in companies with a market cap of over $10 billion. Buying stakes in bigger companies offer these funds more stability, and are well-suited for investors with a "buy and hold" mindset. With an annual return of 11.55% over the last five years, this fund is a winner.
MFS Research R6 (MFRKX - Free Report) has an expense ratio of 0.48% and management fee of 0.43%. MFRKX 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. Thanks to yearly returns of 11.82% over the last five years, MFRKX is an effectively diversified fund with a long reputation of solidly positive performance.
US Global Investor Gold & Precious Metals (USERX - Free Report) has an expense ratio of 0.1% and management fee of 0.97%. USERX is a Sector - Precious Metal mutual fund, typically investing in companies that are involved in the mining and production of precious metals like gold, silver, platinum, and palladium. With annual returns of 15.21% over the last five years, this fund is a well-diversified fund with a long track record of success.
Bottom Line
Along these lines, there you have it - if your financial guide has you put your money into any of our "Mutual Fund Misfires of the Market," there is a strong likelihood that they are either dormant at the worst possible time, inept, or (in all probability) filling their pockets with high fee commissions at the cost of your financial objectives.
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 26, 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.
Wells Fargo Short Duration Government A (MSDAX - Free Report) : 0.81% expense ratio and 0.35% management fee. MSDAX is a Government Bond - Short fund option. These funds hold securities issued by the U.S. federal government in their portfolios, and focus on the short end of the curve, which results in lower yields. With a five year after-costs return of 0.66%, you're for the most part paying more in charges than returns.
Ivy Natural Resources Y (IGNYX - Free Report) . Expense ratio: 1.44%. Management fee: 0.35%. Over the last 5 years, this fund has generated annual returns of -3.53%.
Gabelli Focus Five Fund AAA (GWSVX - Free Report) : This fund has an expense ratio of 1.64% and management fee of 1%. GWSVX 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 -0.45% 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
There you have it: some prime examples of truly bad mutual funds. In contrast, here are a few funds that have achieved high Zacks Ranks and have low fees.
Diamond Hill Large Cap Fund Y (DHLYX - Free Report) : 0.55% expense ratio and 0.5% management fee. DHLYX is classified as a Large Cap Blend fund. More often than not, Large Cap Blend mutual funds invest in companies with a market cap of over $10 billion. Buying stakes in bigger companies offer these funds more stability, and are well-suited for investors with a "buy and hold" mindset. With an annual return of 11.55% over the last five years, this fund is a winner.
MFS Research R6 (MFRKX - Free Report) has an expense ratio of 0.48% and management fee of 0.43%. MFRKX 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. Thanks to yearly returns of 11.82% over the last five years, MFRKX is an effectively diversified fund with a long reputation of solidly positive performance.
US Global Investor Gold & Precious Metals (USERX - Free Report) has an expense ratio of 0.1% and management fee of 0.97%. USERX is a Sector - Precious Metal mutual fund, typically investing in companies that are involved in the mining and production of precious metals like gold, silver, platinum, and palladium. With annual returns of 15.21% over the last five years, this fund is a well-diversified fund with a long track record of success.
Bottom Line
Along these lines, there you have it - if your financial guide has you put your money into any of our "Mutual Fund Misfires of the Market," there is a strong likelihood that they are either dormant at the worst possible time, inept, or (in all probability) filling their pockets with high fee commissions at the cost of your financial objectives.
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.