Advertisement
Canada markets close in 3 hours 53 minutes

  • S&P/TSX

    22,012.21
    +140.25 (+0.64%)
     

  • S&P 500

    5,063.80
    +53.20 (+1.06%)
     

  • DOW

    38,441.59
    +201.61 (+0.53%)
     

  • CAD/USD

    0.7314
    +0.0013 (+0.18%)
     

  • CRUDE OIL

    82.84
    +0.94 (+1.15%)
     

  • Bitcoin CAD

    91,132.91
    +896.55 (+0.99%)
     

  • CMC Crypto 200

    1,432.51
    +17.75 (+1.25%)
     

  • GOLD FUTURES

    2,336.20
    -10.20 (-0.43%)
     

  • RUSSELL 2000

    2,000.19
    +32.72 (+1.66%)
     

  • 10-Yr Bond

    4.5900
    -0.0330 (-0.71%)
     

  • NASDAQ

    15,674.25
    +222.94 (+1.44%)
     

  • VOLATILITY

    16.28
    -0.66 (-3.89%)
     

  • FTSE

    8,044.81
    +20.94 (+0.26%)
     

  • NIKKEI 225

    37,552.16
    +113.55 (+0.30%)
     

  • CAD/EUR

    0.6834
    -0.0016 (-0.23%)
     
MARKETS LIVE BLOG:

STOCKS EXTEND GAINS AS RESULTS SEASON KICKS INTO HIGH GEAR

Tech-focused investors prepare for fresh wave of earnings highlighted by struggling Tesla

3 Mutual Fund Misfires To Avoid In Your Retirement Portfolio - November 07, 2019

Zacks Equity Research

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.

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.

ADVERTISEMENT

Templeton Growth R (TEGRX): 1.28% expense ratio and 0.68% management fee. TEGRX is a Global - Equity mutual fund, which invests their assets in large markets, leveraging the global economy. With a five year after-expenses return of 0.96%, you're mostly paying more in fees than returns.

PACE International Emerging Markets Equity A (PWEAX): PWEAX is a Non US - Equity option, focusing their investments acoss emerging and developed markets, and can often extend across cap levels too. PWEAX offers an expense ratio of 1.7% and annual returns of -0.63% over the last five years. Even if this fund can be positioned as a hedge during the recent bull-market, paying more in fees than returns over the long-term should never be an acceptable result.

ProFunds Biotech Ultra Sector Service Class (BIPSX): This fund has an expense ratio of 2.45% and management fee of 0.75%. BIPSX is classified as a Sector - Health fund. Healthcare is one of the biggest sectors of the American economy, and these kinds of mutual funds provide a great opportunity to invest in this industry. With an annual average return of -0.97% over the last five years, the only thing absolute about this absolute return fund is that it absolutely deserves to be on our "worst offender" list.

3 Top Ranked Mutual Funds

Since you've seen the most noticeably lowest Zacks Ranked mutual funds, how about we take a look at some of the top ranked mutual funds with the least fees.

Fidelity Advisor Semiconductors I (FELIX): 0.84% expense ratio and 0.54% management fee. With a much more diversified approach, FELIX--part of the Sector - Tech mutual fund category--gives investors a way to own a stake in the notoriously risky tech sector. With an annual return of 19.38% over the last five years, this fund is a winner.

Principal Mid Cap R3 (PMBMX): Expense ratio: 1.16%. Management fee: 0.58%. PMBMX is a Mid Cap Growth mutual fund. These mutual funds choose companies with a stock market valuation between $2 billion and $10 billion. PMBMX has managed to produce a robust 12.94% over the last five years.

MFS Mass Investors Growth Stock C (MIGDX) has an expense ratio of 1.48% and management fee of 0.33%. MIGDX 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. With yearly returns of 12.76% 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.

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>>
 
Get Your Free (FELIX): Fund Analysis Report
 
Get Your Free (BIPSX): Fund Analysis Report
 
Get Your Free (PWEAX): Fund Analysis Report
 
Get Your Free (TEGRX): Fund Analysis Report
 
Get Your Free (MIGDX): Fund Analysis Report
 
Get Your Free (PMBMX): Fund Analysis Report
 
To read this article on Zacks.com click here.
 
Zacks Investment Research