3 Mutual Fund Misfires to Avoid - October 03, 2019

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.

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.

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.

QS International Equity A (LMEAX): 1.26% expense ratio and 0.75% management fee. LMEAX is a Non US - Equity fund. Many of these funds like to allocate across emerging and developed markets, and will often focus on all cap levels. With a five year after-expenses return of 1.04%, you're mostly paying more in fees than returns.

Brookfield Global Listed Infrastructure C (BGLCX). Expense ratio: 2.1%. Management fee: 0.75%. Over the last 5 years, this fund has generated annual returns of -0.43%.

Janus Henderson Short Term Bond S (JSHSX) - 0.98% expense ratio, 0.55% management fee. JSHSX is an Investment Grade Bond - Short option; these funds focus on the short end of the curve, generally with bonds that mature in less than two years. JSHSX has generated annual returns of 0.96% 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.

MSIF Growth Portfolio IS (MGRPX) is a winner, with an expense ratio of just 0.49% and a five-year annualized return track record of 17.75%.

Loomis Sayles Growth Fund N (LGRNX) has an expense ratio of 0.56% and management fee of 0.5%. LGRNX is a Large Cap Growth option; these mutual funds purchase stakes in numerous large U.S. companies that are expected to develop and grow at a faster rate than other large-cap stocks. Thanks to yearly returns of 14.43% over the last five years, LGRNX is an effectively diversified fund with a long reputation of solidly positive performance.

Janus Henderson Enterprise N (JDMNX) has an expense ratio of 0.66% and management fee of 0.64%. JDMNX is a Mid Cap Growth mutual fund. These funds aim to target companies with a market capitalization between $2 billion and $10 billion that are also expected to exhibit more extensive growth opportunities for investors than their peers. With yearly returns of 14.52% over the last five years, this fund is well-diversified with a long reputation of salutary performance.

Bottom Line

We hope that your investment advisor (if you use one) has you invested in one or all of the top-ranked mutual funds we've reviewed. But if that is not the case, and your advisor has you invested in any of the funds on our "worst offender" list, it might be time to have a conversation or reconsider this vitally important relationship.

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