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.
The easiest way to judge a mutual fund's quality over time is by analyzing its performance and fees. Our Zacks Rank of over 19,000 mutual funds has identified some of the worst of the worst mutual funds you should avoid, the funds with the highest fees and poorest long-term performance.
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.
Iron Strategic Income Fund Investor (IRNIX): 1.45% expense ratio and 0.65% management fee. IRNIX 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 a five year after-expenses return of 0.97%, you're mostly paying more in fees than returns.
Mainstay ICAP (LON:NXGN) International Investor (ICELX): 1.41% expense ratio, 0.8%. ICELX is a Non US - Equity option, focusing their investments acoss emerging and developed markets, and can often extend across cap levels too. This fund has yearly returns of -0.07% over the most recent five years. Another fund liable of having investors pay more in charges than what they receive in return.
Thornburg Limited Term Municipal CA A (LTCAX) - 0.94% expense ratio, 0.49% management fee. This fund has yielded yearly returns of 0.88% in the course of the last five years. Too bad!
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.
Harbor Large Cap Value Institutional (HAVLX) is a fund that has an expense ratio of 0.68%, and a management fee of 0.6%. HAVLX 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 yearly returns of 11.17% over the last five years, this fund clearly wins.
Calvert Equity Portfolio A (CSIEX) is a stand out fund. CSIEX is a Large Cap Growth mutual fund, and these funds invest in many large U.S. firms that are projected to grow at a faster rate than their large-cap peers. With five-year annualized performance of 12.93% and expense ratio of 1%, this diversified fund is an attractive buy with a strong history of performance.
Janus Henderson Growth & Income D (JNGIX) has an expense ratio of 0.77% and management fee of 0.6%. JNGIX 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. With annual returns of 11.56% 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).
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Zacks Investment Research