In This Article:
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.
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.
ClearBridge Tactical Dividend Income C SMDLX: Expense ratio: 1.96%. Management fee: 0.75%. After expenses, the 5 year return is 1.55%, meaning your fees are far higher than the fund's returns.
Sierra Core Retirement I SIRIX: 1.73% expense ratio, 1.25% management fee. SIRIX 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. The fund has lagged performance-wise, so perhaps a simpler index future investing strategy might be more effective.
IVA International Fund A IVIOX - 1.26% expense ratio, 0.9% management fee. IVIOX is a part of the Non US - Equity fund category, many of which will focus across all cap levels, and will typically allocate their investments between emerging and developed markets. IVIOX has generated annual returns of 1.28% over the last five years. Ouch!
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.
MFS Growth Fund R4 MFEJX is a winner, with expense ratio of just 1.22% and a five-year annualized return track record of 14.44%
American Century NT Growth Institutional ACLTX: Expense ratio: 0.63%. Management fee: 0.62%. ACLTX 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. ACLTX has managed to produce a robust 12.86% over the last five years.
Fidelity Trend Fund FTRNX is an attractive fund with a five-year annualized return of 12.49% and expense ratio of just 1.15%. FTRNX is a Global - Equity mutual fund, which invests their assets in large markets, leveraging the global economy.