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Mutual Fund Misfires of the Market - March 12, 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.

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.

Goldman Sachs Dynamic Allocation A (GDAFX - Free Report) : 1.16% expense ratio and 0.79% management fee. GDAFX 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 a five year after-expenses return of -0.77%, you're mostly paying more in fees than returns.

MainStay International Opportunities A (MYITX - Free Report) : MYITX 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. MYITX offers an expense ratio of 1.75% and annual returns of 0.94% 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.

American Century Short Term Government C (TWACX - Free Report) - 1.56% expense ratio, 0.54% management fee. TWACX 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. TWACX has generated annual returns of -0.03% over the last five years. Ouch!

3 Top Ranked Mutual Funds

Now that we've covered our "worst offender" list, let's take a look at some of Zacks' highest ranked mutual funds with some of the lowest fees you may want to consider.

Columbia Select Large Cap Growth A (ELGAX - Free Report) : Expense ratio: 1.11%. Management fee: 0.66%. ELGAX 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. This fund has achieved five-year annual returns of an astounding 10.29%.

Hartford Healthcare Fund HLS IA (HIAHX - Free Report) has an expense ratio of 0.9% and management fee of 0.84%. HIAHX is part of the Sector - Health category, offering investors a focus on the healthcare industry, one of the largest sectors in the American economy. Thanks to yearly returns of 10.58% over the last five years, HIAHX is an effectively diversified fund with a long reputation of solidly positive performance.

Emerald Growth Fund Institutional (FGROX - Free Report) : Expense ratio: 0.69%. Management fee: 0.56%. FGROX is a Small Cap Growth mutual fund building their portfolio around stocks with market caps under $2 billion and large growth opportunities. FGROX has produced a 10.36% 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.

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