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3 Mutual Fund Misfires to Avoid - October 10, 2019

You may need to start looking for a new financial advisor if your current one has put any of these high-fee, low-return "Mutual Fund Misfires of the Market" into your portfolio.

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.

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Copeland Risk Managed Dividend Growth C (CDCRX): 2.2% expense ratio and 1% management fee. CDCRX 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 a five year after-costs return of 1.62%, you're for the most part paying more in charges than returns.

Wells Fargo Absolute Return Admiral (WARDX). Expense ratio: 1.4%. Management fee: 1%. Over the last 5 years, this fund has generated annual returns of 1.04%.

Hartford International Small Company R4 (HNSSX) - 1.35% expense ratio, 0.9% management fee. HNSSX is a Non US - Equity option, focusing their investments acoss emerging and developed markets, and can often extend across cap levels too. HNSSX has generated annual returns of 0.01% over the last five years. Ouch!

3 Top Ranked Mutual Funds

Now that you've seen the worst Zacks Ranked mutual funds, let's have a look at some of the highest ranked funds with the lowest fees.

Fidelity Select Software & Company Services (FSCSX) is a fund that has an expense ratio of 0.74%, and a management fee of 0.54%. FSCSX is a Sector - Tech mutual fund, allowing investors to own a stake in a notoriously volatile sector with a much more diversified approach. With yearly returns of 18.59% over the last five years, this fund clearly wins.

City Natural Rochdale US Core Equity & Income N (CNRWX) has an expense ratio of 1.03% and management fee of 0.4%. CNRWX 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 10.95% over the last five years, CNRWX is an effectively diversified fund with a long reputation of solidly positive performance.

Principal Capital Appreciation R4 (PCAPX) is an attractive fund with a five-year annualized return of 10.1% and an expense ratio of just 0.87%. PCAPX is part of the Large Cap Blend section, and these mutual funds most often invest in firms with a market capitalization of $10 billion or more. By investing in bigger companies, these funds offer more stability, and are often well-suited for investors with a "buy and hold" mindset.

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.

If you have concerns or any doubts about your investment advisor, read our just-released report:

4 Warning Signs That Your Advisor Might be Sabotaging Your Financial Future


This report can help you avoid the costly mistake of picking or sticking with the wrong investment advisor. Click here for free report>>
 
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Zacks Investment Research