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Avoid These 3 Mutual Fund Misfires - December 05, 2019

Zacks Equity Research

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.

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.

Wells Fargo Absolute Return Admiral (WARDX): 1.45% expense ratio and 0.72% management fee. WARDX is an Allocation Balanced mutual fund. Allocation Balanced funds look to invest across asset types, like stocks, bonds, and cash, and including precious metals or commodities is not unusual; these funds are mostly categorized by their respective asset allocation. With a five year after-expenses return of 1.31%, you're mostly paying more in fees than returns.

Janus Henderson Emerging Markets I (HEMIX). Expense ratio: 1.15%. Management fee: 0.72%. Over the last 5 years, this fund has generated annual returns of 0.64%.

Gabelli Focus Five Fund C (GWSCX) - 2.46% expense ratio, 1% management fee. This fund has yielded yearly returns of -1.93% in the course of the last five years. Too bad!

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.

Conestoga Small Cap Institutional (CCALX) is a winner, with an expense ratio of just 0.9% and a five-year annualized return track record of 15.54%.

Fidelity Series Growth Company (FCGSX): Expense ratio: 0.01%. Management fee: 0%. FCGSX 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. FCGSX has managed to produce a robust 14.42% over the last five years.

Victory Sycamore Established Value Y (VEVYX) is an attractive fund with a five-year annualized return of 10.46% and an expense ratio of just 0.62%. VEVYX, an All Cap Value option, is a type of mutual fund that buys stakes in companies in all three valuation categories.

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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