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Does Your Retirement Portfolio Hold These 3 Mutual Fund Misfires? - February 26, 2020

Zacks Equity Research
·4 min read

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.

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.

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Templeton Global Balanced Fund C (FCGBX): 1.95% expense ratio and 0.73% management fee. FCGBX 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 1.53%, you're for the most part paying more in charges than returns.

Goldman Sachs N-11 Equity Fund Institutional (GSYIX): 1.34% expense ratio, 1.13%. GSYIX 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 yearly returns of -2.41% over the most recent five years. Another fund liable of having investors pay more in charges than what they receive in return.

Eaton Vance Government Obligation A (EVGOX): This fund has an expense ratio of 1.26% and management fee of 0.65%. EVGOX is a Government Mortgage - Short fund, focusing on the mortgage-backed securities (MBS) market and securities that have less than three years until maturity. With an annual average return of 0% 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 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.

Columbia Acorn European Fund Z (CAEZX) is a winner, with an expense ratio of just 1.19% and a five-year annualized return track record of 10.74%.

MFS Mass Investors Growth Stock R2 (MIRGX) is a stand out fund. MIRGX 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. With five-year annualized performance of 13.7% and expense ratio of 0.98%, this diversified fund is an attractive buy with a strong history of performance.

Franklin DynaTech R (FDNRX) is an attractive fund with a five-year annualized return of 16.2% and an expense ratio of just 1.1%. FDNRX is a Sector - Tech mutual fund, allowing investors to own a stake in a notoriously volatile sector with a much more diversified approach.

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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If you have $500,000 or more to invest and want to learn more, click the link to download our free report, 9 Retirement Mistakes that will Ruin Your Retirement.


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Zacks Investment Research