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Does Your Retirement Portfolio Hold These 3 Mutual Fund Misfires? - February 24, 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.

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.

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American Century Short Term Government C (TWACX): 1.56% expense ratio and 0.54% management fee. TWACX is part of the Government Bond - Short fund category. Often seen as risk-free assets, these funds hold securities issued by the U.S. federal government and they focus on the short end of the curve. With a five year after-expenses return of -0.03%, you're mostly paying more in fees than returns.

Janus Henderson Short Term Bond C (JSHCX). Expense ratio: 1.49%. Management fee: 0.54%. Over the last 5 years, this fund has generated annual returns of 0.73%.

AB Allocation Market Real Return 1 (AMTOX) - 1.09% expense ratio, 0.75% management fee. This fund has yielded yearly returns of 0.95% in the course of the last five years. Too bad!

3 Top Ranked Mutual Funds

Since you've seen the most noticeably lowest Zacks Ranked mutual funds, how about we take a look at some of the top ranked mutual funds with the least fees.

AQR Large Cap Momentum Style R6 (QMORX) is a fund that has an expense ratio of 0.3%, and a management fee of 0.25%. QMORX 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 yearly returns of 10.74% over the last five years, this fund clearly wins.

Conestoga Smid Cap Investor (CCSMX) is a stand out fund. CCSMX 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 five-year annualized performance of 14.54% and expense ratio of 1.1%, this diversified fund is an attractive buy with a strong history of performance.

Hartford Stock HLS IA (HSTAX) has an expense ratio of 0.52% and management fee of 0.48%. HSTAX is classified as a Large Cap Blend fund. More often than not, Large Cap Blend mutual funds invest in companies with a market cap of over $10 billion. Buying stakes in bigger companies offer these funds more stability, and are well-suited for investors with a "buy and hold" mindset. With annual returns of 11.63% over the last five years, this fund is a well-diversified fund with a long track record of success.

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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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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Get Your Free (CCSMX): Fund Analysis Report
 
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Get Your Free (JSHCX): Fund Analysis Report
 
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