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Does your current advisor have your money invested in these "Mutual Fund Misfires of the Market" that charge high fees for low returns? If so, it may be time for a new advisor.
High fees coupled with poor results: It's a straightforward equation for an awful mutual fund. Some are more regrettable than others - and some are bad to the point that they have got a "Strong Sell" from our Zacks Rank, the lowest positioning of the almost 19,000 mutual funds we rank every 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.
Saratoga International Equity I (SIEPX - Free Report) : 1.25% expense ratio and 0.75% management fee. SIEPX 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 a five year after-costs return of 0.41%, you're for the most part paying more in charges than returns.
American Funds ST Bond Fund of America A (ASBAX - Free Report) : 0.7% expense ratio, 0.27%. ASBAX 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. This fund has yearly returns of 0.69% over the most recent five years. Another fund liable of having investors pay more in charges than what they receive in return.
AB Unconstrained Bond K : Expense ratio: 0.9%. Management fee: 0.5%. AGSKX 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. With annual returns of just 0.5%, it's no surprise this fund has received Zacks' "Strong Sell" ranking.
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.
MFS Mass Investors Growth Stock R4 (MIGKX - Free Report) : 0.48% expense ratio and 0.33% management fee. MIGKX 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. With an annual return of 14.27% over the last five years, this fund is a winner.
Baron Partners Fund Retail (BPTRX - Free Report) has an expense ratio of 1.33% and management fee of 1%. BPTRX is a Mid Cap Growth mutual fund. These funds aim to target companies with a market capitalization between $2 billion and $10 billion that are also expected to exhibit more extensive growth opportunities for investors than their peers. With annual returns of 12.39% over the last five years, this is a well-diversified fund with a long track record of success.
Federated MDT Small Cap Growth Fund I (QISGX - Free Report) : Expense ratio: 0.25%. Management fee: 0.8%. QISGX 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. QISGX has produced a 12.1% over the last five years.
Bottom Line
We hope that your investment advisor (if you use one) has you invested in one or all of the top-ranked mutual funds we've reviewed. But if that is not the case, and your advisor has you invested in any of the funds on our "worst offender" list, it might be time to have a conversation or reconsider this vitally important relationship.
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
3 Mutual Fund Misfires to Avoid - March 10, 2020
Does your current advisor have your money invested in these "Mutual Fund Misfires of the Market" that charge high fees for low returns? If so, it may be time for a new advisor.
High fees coupled with poor results: It's a straightforward equation for an awful mutual fund. Some are more regrettable than others - and some are bad to the point that they have got a "Strong Sell" from our Zacks Rank, the lowest positioning of the almost 19,000 mutual funds we rank every 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.
Saratoga International Equity I (SIEPX - Free Report) : 1.25% expense ratio and 0.75% management fee. SIEPX 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 a five year after-costs return of 0.41%, you're for the most part paying more in charges than returns.
American Funds ST Bond Fund of America A (ASBAX - Free Report) : 0.7% expense ratio, 0.27%. ASBAX 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. This fund has yearly returns of 0.69% over the most recent five years. Another fund liable of having investors pay more in charges than what they receive in return.
AB Unconstrained Bond K : Expense ratio: 0.9%. Management fee: 0.5%. AGSKX 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. With annual returns of just 0.5%, it's no surprise this fund has received Zacks' "Strong Sell" ranking.
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.
MFS Mass Investors Growth Stock R4 (MIGKX - Free Report) : 0.48% expense ratio and 0.33% management fee. MIGKX 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. With an annual return of 14.27% over the last five years, this fund is a winner.
Baron Partners Fund Retail (BPTRX - Free Report) has an expense ratio of 1.33% and management fee of 1%. BPTRX is a Mid Cap Growth mutual fund. These funds aim to target companies with a market capitalization between $2 billion and $10 billion that are also expected to exhibit more extensive growth opportunities for investors than their peers. With annual returns of 12.39% over the last five years, this is a well-diversified fund with a long track record of success.
Federated MDT Small Cap Growth Fund I (QISGX - Free Report) : Expense ratio: 0.25%. Management fee: 0.8%. QISGX 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. QISGX has produced a 12.1% over the last five years.
Bottom Line
We hope that your investment advisor (if you use one) has you invested in one or all of the top-ranked mutual funds we've reviewed. But if that is not the case, and your advisor has you invested in any of the funds on our "worst offender" list, it might be time to have a conversation or reconsider this vitally important relationship.
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.