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Does Your Retirement Portfolio Hold These 3 Mutual Fund Misfires? - March 23, 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.
How can you tell a good mutual fund from a bad one? It's pretty basic: If the fund has high fees and performs poorly, it's not good. Of course, there's a range - but when a mutual fund earns a Zacks Rank of #5 (Strong Sell) that means it's among the worst of roughly 19,000 funds we rate each 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.
First Investor International Opportunities Bond A : This fund has an expense ratio of 1.36% and a management fee of 0.75%. 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. FIOBX is an International Bond - Developed fund, and these funds funds focus on fixed income securities from developed nations apart from the United States. This usually results in countries like Japan, Germany, the UK, France, and Australia dominating the list of top holdings. The fund has lagged performance-wise, so perhaps a simpler index future investing strategy might be more effective.
Janus Henderson Diversified Alternatives T : 1.29% expense ratio, 1%. JDATX is a part of the Allocation Balanced fund category; these funds like to invest in a variety of asset types, finding a balance between stocks, bonds, cash, and sometimes even precious metals and commodities; they are mostly categorized by their respective asset allocation. This fund has yearly returns of 0.48% over the most recent five years. Another fund liable of having investors pay more in charges than what they receive in return.
AQR Equity Market Neutral N (QMNNX - Free Report) : This fund has an expense ratio of 1.55% and management fee of 1.1%. QMNNX is a Market Neutral - Equity mutual fund. These funds attempt to maximize returns, and usually hold 50% of their securities in a long position and 50% in a short position. With an annual average return of 0.35% 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.
MFS Mass Investors Growth Stock R6 (MIGNX - Free Report) is a winner, with an expense ratio of just 0.37% and a five-year annualized return track record of 14.38%.
AQR Large Cap Defensive Style I (AUEIX - Free Report) has an expense ratio of 0.38% and management fee of 0.25%. AUEIX is part of the Large Cap Blend section, and these mutual funds most often invest in firms with a market capitalization of $10 billion or more. By investing in bigger companies, these funds offer more stability, and are often well-suited for investors with a "buy and hold" mindset. With annual returns of 13.39% over the last five years, this is a well-diversified fund with a long track record of success.
Loomis Sayles Small Cap Growth N (LSSNX - Free Report) has an expense ratio of 0.82% and management fee of 0.75%. LSSNX 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 annual returns of 11.63% over the last five years, this fund is a well-diversified fund with a long track record of success.
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).
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.
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Does Your Retirement Portfolio Hold These 3 Mutual Fund Misfires? - March 23, 2020
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.
How can you tell a good mutual fund from a bad one? It's pretty basic: If the fund has high fees and performs poorly, it's not good. Of course, there's a range - but when a mutual fund earns a Zacks Rank of #5 (Strong Sell) that means it's among the worst of roughly 19,000 funds we rate each 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.
First Investor International Opportunities Bond A : This fund has an expense ratio of 1.36% and a management fee of 0.75%. 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. FIOBX is an International Bond - Developed fund, and these funds funds focus on fixed income securities from developed nations apart from the United States. This usually results in countries like Japan, Germany, the UK, France, and Australia dominating the list of top holdings. The fund has lagged performance-wise, so perhaps a simpler index future investing strategy might be more effective.
Janus Henderson Diversified Alternatives T : 1.29% expense ratio, 1%. JDATX is a part of the Allocation Balanced fund category; these funds like to invest in a variety of asset types, finding a balance between stocks, bonds, cash, and sometimes even precious metals and commodities; they are mostly categorized by their respective asset allocation. This fund has yearly returns of 0.48% over the most recent five years. Another fund liable of having investors pay more in charges than what they receive in return.
AQR Equity Market Neutral N (QMNNX - Free Report) : This fund has an expense ratio of 1.55% and management fee of 1.1%. QMNNX is a Market Neutral - Equity mutual fund. These funds attempt to maximize returns, and usually hold 50% of their securities in a long position and 50% in a short position. With an annual average return of 0.35% 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.
MFS Mass Investors Growth Stock R6 (MIGNX - Free Report) is a winner, with an expense ratio of just 0.37% and a five-year annualized return track record of 14.38%.
AQR Large Cap Defensive Style I (AUEIX - Free Report) has an expense ratio of 0.38% and management fee of 0.25%. AUEIX is part of the Large Cap Blend section, and these mutual funds most often invest in firms with a market capitalization of $10 billion or more. By investing in bigger companies, these funds offer more stability, and are often well-suited for investors with a "buy and hold" mindset. With annual returns of 13.39% over the last five years, this is a well-diversified fund with a long track record of success.
Loomis Sayles Small Cap Growth N (LSSNX - Free Report) has an expense ratio of 0.82% and management fee of 0.75%. LSSNX 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 annual returns of 11.63% over the last five years, this fund is a well-diversified fund with a long track record of success.
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).
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.