Are You Invested In These 3 Mutual Fund Misfires? - February 24, 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.

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.

Brookfield Global Listed Infrastructure C (BGLCX): This fund has an expense ratio of 2.1% and a management fee of 0.85%. 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. BGLCX is a Global - Equity mutual fund. These funds invest in large markets like the U.S., Europe, and Japan, and operate with very few geographical limitations. The fund has lagged performance-wise, so perhaps a simpler index future investing strategy might be more effective.

AIG (NYSE:AIG) Commodity Strategy A (SUNAX). Expense ratio: 1.72%. Management fee: 0.85%. Over the last 5 years, this fund has generated annual returns of -3.36%.

Catalyst MLP & Infrastructure C (MLXCX): This fund has an expense ratio of 2.43% and management fee of 1.25%. MLXCX is a Sector - Energy mutual fund, which encompasses a wide range of vastly changing and vitally important industries throughout this massive global sector. With an annual average return of -7.6% 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 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.

BlackRock (NYSE:BLK) Advantage Large Cap Growth R (BMCRX): 1.12% expense ratio and 0.57% management fee. BMCRX 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. With an annual return of 11.83% over the last five years, this fund is a winner.

Janus Henderson Global Technology A (JATAX) is a stand out fund. 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. With five-year annualized performance of 18.74% and expense ratio of 1.01%, this diversified fund is an attractive buy with a strong history of performance.

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MSIF Global Opportunity Portfolio IS (MGTSX): Expense ratio: 0.84%. Management fee: 0.74%. MGTSX is a Global - Equity mutual fund investing in bigger markets like the U.S., Europe, and Japan; these kinds of funds aren't limited by geography. MGTSX has produced a 18.03% over the last five years.

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).

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