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Does Your Retirement Portfolio Hold These 3 Mutual Fund Misfires? - March 06, 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.

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.

America First Income Trends I (AFPIX - Free Report) : This fund has an expense ratio of 1.56% and a management fee of 1.25%. 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. AFPIX is classified as a Diversified Bonds fund, which offers exposure to a wide variety of fixed income types, stretching across various issuers, credit levels, and maturities. The fund has lagged performance-wise, so perhaps a simpler index future investing strategy might be more effective.

Ascendant Deep Value Convertibles A : AEQAX is a Global - Equity mutual fund, which invests their assets in large markets, leveraging the global economy. AEQAX offers an expense ratio of 2.24% and annual returns of -0.55% 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.

Camelot Premium Return A : Expense ratio: 4.36%. Management fee: 1%. CPRFX is classified as an Allocation Balanced fund, which seeks to invest in a balance of asset types, like stocks, bonds, and cash, and including precious metals or commodities is not unusual. With annual returns of just 1.17%, 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.

MassMutual Select Small Cap Growth Equity I (MSGZX - Free Report) is a fund that has an expense ratio of 0.86%, and a management fee of 0.8%. MSGZX 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. With yearly returns of 10.98% over the last five years, this fund clearly wins.

MSIF Global Opportunity Portfolio I (MGGIX - Free Report) : Expense ratio: 0.92%. Management fee: 0.74%. MGGIX is a Global - Equity mutual fund investing in bigger markets like the U.S., Europe, and Japan; these kinds of funds aren't limited by geography. MGGIX has managed to produce a robust 17.99% over the last five years.

Great-West Multi Manager Large Cap Growth (MXLGX - Free Report) : Expense ratio: 1%. Management fee: 0.64%. MXLGX is a Large Cap Growth mutual fund, and these funds invest in many large U.S. firms that are projected to grow at a faster rate than their large-cap peers. MXLGX has produced a 13.76% over the last five years.

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).

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