Back to top

Image: Bigstock

3 Mutual Fund Misfires To Avoid In Your Retirement Portfolio - March 17, 2020

Read MoreHide Full Article

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.

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.

Touchstone Ultra Short Duration Fixed Income Y (TSYYX - Free Report) : Expense ratio: 0.44%. Management fee: 0.25%. After expenses, the 5 year return is -0.19%, meaning your fees are far higher than the fund's returns.

Leader Short-Term Bond Fund A : 1.66% expense ratio, 0.75%. LCAMX is an Investment Grade Bond - Short option; these funds focus on the short end of the curve, generally with bonds that mature in less than two years. This fund has yearly returns of -0.24% over the most recent five years. Another fund liable of having investors pay more in charges than what they receive in return.

Transamerica Emerging Markets Equity A - 1.57% expense ratio, 0.92% management fee. This fund has yielded yearly returns of 1.4% in the course of the last five years. Too bad!

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.

Jensen Quality Growth Fund J (JENSX - Free Report) : Expense ratio: 0.86%. Management fee: 0.49%. JENSX is a part of the Large Cap Growth mutual fund category, which invest in many large U.S. companies that are expected to grow much faster compared to other large-cap stocks. This fund has achieved five-year annual returns of an astounding 13.06%.

Fidelity Advisor Mega Cap Stock Z (FZALX - Free Report) has an expense ratio of 0.53% and management fee of 0.44%. FZALX is a Large Cap Blend fund, targeting companies with market caps of over $10 billion. These funds offer investors a stability, and are perfect for people with a "buy and hold" mindset. Thanks to yearly returns of 10.12% over the last five years, FZALX is an effectively diversified fund with a long reputation of solidly positive performance.

DFA Continental Small Company I (DFCSX - Free Report) has an expense ratio of 0.56% and management fee of 0.6%. DFCSX is a Europe - Equity mutual fund option, and these funds tend to invest their assets in stocks across the European continent, including countries such as Great Britain, Germany, France, Italy, and Spain. With annual returns of 10.02% over the last five years, this fund is a well-diversified fund with a long track record of success.

Bottom Line

So, there you have it - if your advisor has you invested in any of our "Mutual Fund Misfires of the Market," there is a good probability that they are either asleep at the wheel, incompetent, or (most likely) lining their pockets with high fee commissions at your financial expense.

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.

Published in