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3 Mutual Fund Misfires To Avoid In Your Retirement Portfolio - November 29, 2019

Zacks Equity Research

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.

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.

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JPMorgan Research Market Neutral C (JMNCX): This fund has an expense ratio of 4.15% and a management fee of 0.8%. 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. JMNCX is a Market Neutral - Equity mutual fund. These portfolios usually hold 50% of their securities in a long position, as well as 50% in a short position. The fund has lagged performance-wise, so perhaps a simpler index future investing strategy might be more effective.

AB Allocation Market Real Return C (ACMTX). Expense ratio: 2.01%. Management fee: 0.8%. Over the last 5 years, this fund has generated annual returns of -3.4%.

Third Avenue Real Estate Value Investor (TVRVX) - 1.4% expense ratio, 0.9% management fee. This fund has yielded yearly returns of 1.08% in the course of the last five years. Too bad!

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.

Laudus US Large Cap Growth (LGILX): 0.75% expense ratio and 0.63% management fee. LGILX 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 an annual return of 13.28% over the last five years, this fund is a winner.

Janus Henderson US Managed Volatilty T (JRSTX) has an expense ratio of 0.8% and management fee of 0.5%. JRSTX is classified as a Large Cap Blend fund. More often than not, Large Cap Blend mutual funds invest in companies with a market cap of over $10 billion. Buying stakes in bigger companies offer these funds more stability, and are well-suited for investors with a "buy and hold" mindset. Thanks to yearly returns of 10.16% over the last five years, JRSTX is an effectively diversified fund with a long reputation of solidly positive performance.

Principal Small Cap Growth I Institutional (PGRTX) has an expense ratio of 1.02% and management fee of 1.08%. PGRTX is a Small Cap Growth mutual fund and tends to feature small companies in up-and-coming industries and markets. With yearly returns of 11.37% over the last five years, this fund is well-diversified with a long reputation of salutary performance.

Bottom Line

Along these lines, there you have it - if your financial guide has you put your money into any of our "Mutual Fund Misfires of the Market," there is a strong likelihood that they are either dormant at the worst possible time, inept, or (in all probability) filling their pockets with high fee commissions at the cost of your financial objectives.

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If you have $500,000 or more to invest and want to learn more, click the link to download our free report, 9 Retirement Mistakes that will Ruin Your Retirement.


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Zacks Investment Research