Does Your Retirement Portfolio Hold These 3 Mutual Fund Misfires? - October 09, 2019

You may need to start looking for a new financial advisor if your current one has put any of these high-fee, low-return "Mutual Fund Misfires of the Market" into your portfolio.

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.

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.

Ariel International Equity Investor (AINTX): 1.13% expense ratio and 0.8% management fee. AINTX is a Global - Equity mutual fund. These funds invest in large markets like the U.S., Europe, and Japan, and operate with very few geographical limitations. With a five year after-costs return of 1.1%, you're for the most part paying more in charges than returns.

Manning & Napier International I (MNIIX): 0.85% expense ratio, 0.6% management fee. MNIIX is a Non US - Equity option, focusing their investments acoss emerging and developed markets, and can often extend across cap levels too. This fund has an annual returns of 0.31% over the last five years. Another fund guilty of having investors pay more in fees than returns.

AQR Multi Strategy Alternative I (ASAIX) - 1.96% expense ratio, 1.75% management fee. ASAIX 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. ASAIX has generated annual returns of -0.36% over the last five years. Ouch!

3 Top Ranked Mutual Funds

Now that we've covered our "worst offender" list, let's take a look at some of Zacks' highest ranked mutual funds with some of the lowest fees you may want to consider.

Janus Henderson Global Life Science I (JFNIX) is a fund that has an expense ratio of 0.77%, and a management fee of 0.64%. JFNIX is part of the Sector - Health category, offering investors a focus on the healthcare industry, one of the largest sectors in the American economy. With yearly returns of 10.94% over the last five years, this fund clearly wins.

Loomis Sayles Growth Fund Y (LSGRX): Expense ratio: 0.66%. Management fee: 0.5%. LSGRX is a Large Cap Growth mutual fund, and these funds invest in many large U.S. firms that are projected to grow at a faster rate than their large-cap peers. LSGRX has managed to produce a robust 14.34% over the last five years.

Neuberger Berman Mid Cap Growth Investor (NMANX) has an expense ratio of 0.9% and management fee of 0.76%. NMANX 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 10.82% over the last five years, this fund is a well-diversified fund with a long track record of success.

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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4 Warning Signs That Your Advisor Might be Sabotaging Your Financial Future

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