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Mutual Fund Misfires of the Market - March 13, 2020
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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.
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.
Catalyst MLP & Infrastructure A (MLXAX - Free Report) : This fund has an expense ratio of 1.68% 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. MLXAX is a Sector - Energy mutual fund, which encompasses a wide range of vastly changing and vitally important industries throughout this massive global sector. The fund has lagged performance-wise, so perhaps a simpler index future investing strategy might be more effective.
AQR Style Premia Alternative N (QSPNX - Free Report) : QSPNX is a Long Short - Equity fund, and these funds aim to minimize exposure to the broader market, taking long positions in equities that are expected to appreciate and short positions in equities that are projected to decline. QSPNX offers an expense ratio of 1.75% and annual returns of -0.74% 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.
Transamerica Small Cap Core A : This fund has an expense ratio of 1.26% and management fee of 0.83%. SCCAX is a Small Cap Value mutual fund option, which typically invest in companies with market caps under $2 billion. With an annual average return of 1.09% 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
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.
TIAA-CREF Social Choice Equity Retirement (TRSCX - Free Report) is a winner, with an expense ratio of just 0.42% and a five-year annualized return track record of 10.43%.
BMO Large-Cap Growth Fund A has an expense ratio of 0.79% and management fee of 0.35%. BALGX 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 12.03% over the last five years, BALGX is an effectively diversified fund with a long reputation of solidly positive performance.
Janus Henderson Global Technology A (JATAX - Free Report) : Expense ratio: 1.01%. Management fee: 0.64%. With a much more diversified approach, JATAX--part of the Sector - Tech mutual fund category--gives investors a way to own a stake in the notoriously risky tech sector. JATAX has produced a 18.74% 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
Mutual Fund Misfires of the Market - March 13, 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.
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.
Catalyst MLP & Infrastructure A (MLXAX - Free Report) : This fund has an expense ratio of 1.68% 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. MLXAX is a Sector - Energy mutual fund, which encompasses a wide range of vastly changing and vitally important industries throughout this massive global sector. The fund has lagged performance-wise, so perhaps a simpler index future investing strategy might be more effective.
AQR Style Premia Alternative N (QSPNX - Free Report) : QSPNX is a Long Short - Equity fund, and these funds aim to minimize exposure to the broader market, taking long positions in equities that are expected to appreciate and short positions in equities that are projected to decline. QSPNX offers an expense ratio of 1.75% and annual returns of -0.74% 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.
Transamerica Small Cap Core A : This fund has an expense ratio of 1.26% and management fee of 0.83%. SCCAX is a Small Cap Value mutual fund option, which typically invest in companies with market caps under $2 billion. With an annual average return of 1.09% 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
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.
TIAA-CREF Social Choice Equity Retirement (TRSCX - Free Report) is a winner, with an expense ratio of just 0.42% and a five-year annualized return track record of 10.43%.
BMO Large-Cap Growth Fund A has an expense ratio of 0.79% and management fee of 0.35%. BALGX 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 12.03% over the last five years, BALGX is an effectively diversified fund with a long reputation of solidly positive performance.
Janus Henderson Global Technology A (JATAX - Free Report) : Expense ratio: 1.01%. Management fee: 0.64%. With a much more diversified approach, JATAX--part of the Sector - Tech mutual fund category--gives investors a way to own a stake in the notoriously risky tech sector. JATAX has produced a 18.74% 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.