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Avoid These 3 Mutual Fund Misfires - December 11, 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.

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.

Guidemark Opportunity Fixed Income Service Class (GMIFX): 1.55% expense ratio and 0.7% management fee. GMIFX is classified as an International Bond - Developed fund; these funds offer investors geographic diversification by focusing on fixed income securities from developed nations besides the United States. Top holdings include assets from countries like Japan, Germany, the UK, France, and Australia. With a five year after-costs return of 0.82%, you're for the most part paying more in charges than returns.

MSIF Multi-Asset Fund A (MMPPX). Expense ratio: 1.42%. Management fee: 0.7%. Over the last 5 years, this fund has generated annual returns of -5.36%.

Transamerica Emerging Markets Equity C (CEMTX): Expense ratio: 2.2%. Management fee: 0.92%. CEMTX is a Non US - Equity option, focusing their investments acoss emerging and developed markets, and can often extend across cap levels too. With annual returns of just -0.59%, it's no surprise this fund has received Zacks' "Strong Sell" ranking.

3 Top Ranked Mutual Funds

Now that you've seen the worst Zacks Ranked mutual funds, let's have a look at some of the highest ranked funds with the lowest fees.

VY T. Rowe Price Diversified Mid Cap Growth S2 (IAXTX): 1.18% expense ratio and 0.74% management fee. IAXTX is a Mid Cap Growth mutual fund. These mutual funds choose companies with a stock market valuation between $2 billion and $10 billion. With an annual return of 11.94% over the last five years, this fund is a winner.

Principal Blue Chip Fund I (PBCKX) is a stand out fund. PBCKX 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 five-year annualized performance of 15.39% and expense ratio of 0.67%, this diversified fund is an attractive buy with a strong history of performance.

Columbia Seligman Communications and Information R4 (SCIOX) has an expense ratio of 0.99% and management fee of 0.87%. SCIOX is a Sector - Tech mutual fund, allowing investors to own a stake in a notoriously volatile sector with a much more diversified approach. With annual returns of 17.5% 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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