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.
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.
Northeast Investors Trust (NTHEX): Expense ratio: 1.56%. Management fee: 0.5%. After expenses, the 5 year return is -0.51%, meaning your fees are far higher than the fund's returns.
Invesco Global Mkt Neutral Fd Cl Y (MKNYX): 1.24% expense ratio, 0.95%. MKNYX is a Market Neutral - Equity mutual fund. These funds attempt to maximize returns, and usually hold 50% of their securities in a long position and 50% in a short position. This fund has yearly returns of -3.81% over the most recent five years. Another fund liable of having investors pay more in charges than what they receive in return.
Federated Government Income Securities C (FGOCX) - 1.76% expense ratio, 0.6% management fee. This fund has yielded yearly returns of 1.07% in the course of the last five years. Too bad!
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.
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. This fund has achieved five-year annual returns of an astounding 16.18%.
WCM Focused International Growth Fund Institutional (WCMIX) has an expense ratio of 1.02% and management fee of 0.85%. WCMIX is a Non US - Equity option, focusing their investments acoss emerging and developed markets, and can often extend across cap levels too. Thanks to yearly returns of 11.78% over the last five years, WCMIX is an effectively diversified fund with a long reputation of solidly positive performance.
Franklin DynaTech A (FKDNX) has an expense ratio of 0.85% and management fee of 0.46%. FKDNX 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 15.25% over the last five years, this fund is a well-diversified fund with a long track record of success.
So, there you have it - if your advisor has you invested in any of our "Mutual Fund Misfires of the Market," there is a good probability that they are either asleep at the wheel, incompetent, or (most likely) lining their pockets with high fee commissions at your financial expense.
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