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 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.
James Alpha Multi-StrtgyAltIncFd I (JAIMX): This fund has an expense ratio of 3.14% and a management fee of 2%. 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. JAIMX is a Long Short - Equity fund, and these funds aim to minimize exposure to the broader market, taking long positions in equities that are expected to appreciate and short positions in equities that are projected to decline. The fund has lagged performance-wise, so perhaps a simpler index future investing strategy might be more effective.
MainStay Cushing Royalty Energy Income I (CURZX): 1.2% expense ratio, 0.95% management fee. CURZX is classified as a Sector - Energy mutual fund. Throughout the massive global energy sector, these funds hold a wide range of quickly changing and vitally important industries. This fund has an annual returns of -14.24% over the last five years. Another fund guilty of having investors pay more in fees than returns.
Transamerica Small Cap Core C (SCCCX): Expense ratio: 2.01%. Management fee: 0.83%. SCCCX is a Small Cap Value fund, and these funds are known for investing in companies with market caps under $2 billion. With annual returns of just 1.54%, it's no surprise this fund has received Zacks' "Strong Sell" ranking.
3 Top Ranked Mutual Funds
There you have it: some prime examples of truly bad mutual funds. In contrast, here are a few funds that have achieved high Zacks Ranks and have low fees.
Conestoga Smid Cap Institutional (CCSGX): 0.85% expense ratio and 0.85% management fee. CCSGX is a Mid Cap Growth mutual fund. These mutual funds choose companies with a stock market valuation between $2 billion and $10 billion. With an annual return of 14.8% over the last five years, this fund is a winner.