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3 Mutual Fund Misfires to Avoid - January 29, 2020

Zacks Equity Research
·4 min read

If your financial advisor made you buy any of these "Mutual Fund Misfires of the Market" with high expenses and low returns, you need to reassess your advisor.

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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AllianzGI Global Natural Resources I (RGLIX): 1.08% expense ratio and 1.05% management fee. RGLIX is a Global - Equity mutual fund investing in bigger markets like the U.S., Europe, and Japan; these kinds of funds aren't limited by geography. With a five year after-costs return of -2.5%, you're for the most part paying more in charges than returns.

Hotchkis and Wiley Mid-Cap Value A (HWMAX). Expense ratio: 1.25%. Management fee: 1.05%. Over the last 5 years, this fund has generated annual returns of -0.49%.

Pioneer Solutions Balanced C (PIDCX) - 1.19% expense ratio, 0% management fee. PIDCX is classified as an Allocation Balanced fund, which seeks to invest in a balance of asset types, like stocks, bonds, and cash, and including precious metals or commodities is not unusual. PIDCX has generated annual returns of 0.49% over the last five years. Ouch!

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.

Nationwide Growth Fund R (GGFRX): Expense ratio: 1.35%. Management fee: 0.6%. GGFRX 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. This fund has achieved five-year annual returns of an astounding 12.7%.

Federated MDT Small Cap Growth Fund I (QISGX): Expense ratio: 0.25%. Management fee: 0.8%. QISGX is a Small Cap Growth mutual fund and tends to feature small companies in up-and-coming industries and markets. QISGX has managed to produce a robust 12.1% over the last five years.

MFS Mid-Cap Growth Fund R4 (OTCJX) has an expense ratio of 0.83% and management fee of 0.71%. OTCJX 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 annual returns of 13.96% over the last five years, this fund is a well-diversified fund with a long track record of success.

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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