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Does Your Retirement Portfolio Hold These 3 Mutual Fund Misfires? - April 06, 2020
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If your advisor has you invested in any of these "Mutual Fund Misfires of the Market" with high fees and low returns, you need to rethink your advisor.
High fees plus poor performance: It's a pretty simple formula for a bad mutual fund. Some are worse than others - and some are so bad that they have earned a "Strong Sell" on the Zacks Rank, the lowest ranking of the nearly 19,000 mutual funds we rank daily.
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.
American Funds ST Bond Fund of America R4 (RAMEX - Free Report) : Expense ratio: 0.69%. Management fee: 0.27%. After expenses, the 5 year return is 0.65%, meaning your fees are far higher than the fund's returns.
Thornburg Limited Term Municipal CA C (LTCCX - Free Report) . Expense ratio: 1.21%. Management fee: 0.27%. Over the last 5 years, this fund has generated annual returns of 0.97%.
Fidelity Advisor Strategy Real Return C (FCSRX - Free Report) : This fund has an expense ratio of 1.85% and management fee of 0.55%. FCSRX is classified in Investment Grade Bond - Intermediate fund category; these funds target the middle section of the curve, typically by investing in bonds that mature in more than three years but less than 15 years. With an annual average return of 1.16% 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
Since you've seen the most noticeably lowest Zacks Ranked mutual funds, how about we take a look at some of the top ranked mutual funds with the least fees.
American Funds Washington Mutual Investors 529E (CWMEX - Free Report) : 0.87% expense ratio and 0.23% management fee. CWMEX is a part of the Large Cap Value category, and invests in equities with a market capitalization of $10 billion or more, but whose share prices do not reflect their intrinsic value. With an annual return of 10.26% over the last five years, this fund is a winner.
Johnson Enhanced Return Fund (JENHX - Free Report) has an expense ratio of 0.3% and management fee of 0.35%. JENHX is an Allocation Balanced mutual fund. Allocation Balanced funds look to invest across asset types, like stocks, bonds, and cash, and including precious metals or commodities is not unusual; these funds are mostly categorized by their respective asset allocation. With annual returns of 11.78% over the last five years, this is a well-diversified fund with a long track record of success.
Vanguard Growth & Income Admiral (VGIAX - Free Report) has an expense ratio of 0.23% and management fee of 0.22%. VGIAX 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 11.32% 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.
Image: Bigstock
Does Your Retirement Portfolio Hold These 3 Mutual Fund Misfires? - April 06, 2020
If your advisor has you invested in any of these "Mutual Fund Misfires of the Market" with high fees and low returns, you need to rethink your advisor.
High fees plus poor performance: It's a pretty simple formula for a bad mutual fund. Some are worse than others - and some are so bad that they have earned a "Strong Sell" on the Zacks Rank, the lowest ranking of the nearly 19,000 mutual funds we rank daily.
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.
American Funds ST Bond Fund of America R4 (RAMEX - Free Report) : Expense ratio: 0.69%. Management fee: 0.27%. After expenses, the 5 year return is 0.65%, meaning your fees are far higher than the fund's returns.
Thornburg Limited Term Municipal CA C (LTCCX - Free Report) . Expense ratio: 1.21%. Management fee: 0.27%. Over the last 5 years, this fund has generated annual returns of 0.97%.
Fidelity Advisor Strategy Real Return C (FCSRX - Free Report) : This fund has an expense ratio of 1.85% and management fee of 0.55%. FCSRX is classified in Investment Grade Bond - Intermediate fund category; these funds target the middle section of the curve, typically by investing in bonds that mature in more than three years but less than 15 years. With an annual average return of 1.16% 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
Since you've seen the most noticeably lowest Zacks Ranked mutual funds, how about we take a look at some of the top ranked mutual funds with the least fees.
American Funds Washington Mutual Investors 529E (CWMEX - Free Report) : 0.87% expense ratio and 0.23% management fee. CWMEX is a part of the Large Cap Value category, and invests in equities with a market capitalization of $10 billion or more, but whose share prices do not reflect their intrinsic value. With an annual return of 10.26% over the last five years, this fund is a winner.
Johnson Enhanced Return Fund (JENHX - Free Report) has an expense ratio of 0.3% and management fee of 0.35%. JENHX is an Allocation Balanced mutual fund. Allocation Balanced funds look to invest across asset types, like stocks, bonds, and cash, and including precious metals or commodities is not unusual; these funds are mostly categorized by their respective asset allocation. With annual returns of 11.78% over the last five years, this is a well-diversified fund with a long track record of success.
Vanguard Growth & Income Admiral (VGIAX - Free Report) has an expense ratio of 0.23% and management fee of 0.22%. VGIAX 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 11.32% 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.