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Does Your Retirement Portfolio Hold 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.

How can you tell a good mutual fund from a bad one? It's pretty basic: If the fund has high fees and performs poorly, it's not good. Of course, there's a range - but when a mutual fund earns a Zacks Rank of #5 (Strong Sell) that means it's among the worst of roughly 19,000 funds we rate each 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.

ProFunds Oil Equipment Service Class & Distribution Investor (OEPIX): 2.09% expense ratio and 0.75% management fee. OEPIX is a Sector - Energy mutual fund, which encompasses a wide range of vastly changing and vitally important industries throughout this massive global sector. With a five year after-expenses return of -32.39%, you're mostly paying more in fees than returns.

Clearbridge International Value I (SBIYX): 0.9% expense ratio, 0.75%. SBIYX is a part of the Non US - Equity fund category, many of which will focus across all cap levels, and will typically allocate their investments between emerging and developed markets. This fund has yearly returns of -1.39% over the most recent five years. Another fund liable of having investors pay more in charges than what they receive in return.

Invesco Gold & Precious Metals Y (IGDYX): This fund has an expense ratio of 1.22% and management fee of 0.75%. IGDYX is classified as a Sector - Precious Metal fund, and these mutual funds invest in stocks with a focus on the mining and production of precious metals like gold, silver, platinum, and palladium. With an annual average return of 0.51% 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

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.

Victory Sycamore Small Company Opportunity Y (VSOYX): 1.09% expense ratio and 0.76% management fee. VSOYX is a Small Cap Value mutual fund option, which typically invest in companies with market caps under $2 billion. With an annual return of 11.15% over the last five years, this fund is a winner.

Fidelity Series Blue Chip Growth (FSBDX): Expense ratio: 0.02%. Management fee: 0%. FSBDX 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. FSBDX has managed to produce a robust 13.74% over the last five years.

Janus Henderson Enterprise D (JANEX) has an expense ratio of 0.81% and management fee of 0.64%. JANEX 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 yearly returns of 14.8% over the last five years, this fund is well-diversified with a long reputation of salutary performance.

Bottom Line

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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