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3 Mutual Fund Misfires to Avoid - November 27, 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.

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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Huber Capital Small Cap Value Investor (HUSIX): 1.61% expense ratio and 0.99% management fee. HUSIX is a Small Cap Value mutual fund, investing in small companies with stock market valuation less than $2 billion. With a five year after-costs return of 1.48%, you're for the most part paying more in charges than returns.

Ivy Global Bond Fund B (IVSBX). Expense ratio: 1.65%. Management fee: 0.99%. Over the last 5 years, this fund has generated annual returns of 1.07%.

Acadian Emerging Markets Institutional (AEMGX): This fund has an expense ratio of 1.38% and management fee of 1%. AEMGX is a Non US - Equity option, focusing their investments acoss emerging and developed markets, and can often extend across cap levels too. With an annual average return of 1.28% 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.

T. Rowe Price Media & Telecomm (PRMTX) is a winner, with an expense ratio of just 0.76% and a five-year annualized return track record of 14.25%.

Frost Growth Equity Institutional (FICEX) has an expense ratio of 0.63% and management fee of 0.5%. FICEX 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 12.44% over the last five years, FICEX is an effectively diversified fund with a long reputation of solidly positive performance.

BlackRock Advantage Large Cap Growth I (CMVIX) has an expense ratio of 0.62% and management fee of 0.57%. CMVIX is a Mid Cap Growth mutual fund. Mid Cap Growth funds pick stocks--usually companies with a market cap between $2 billion and $10 billion--that demonstrate extensive growth opportunities for investors compared to their peers. With yearly returns of 10.97% 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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