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Are You Invested In These 3 Mutual Fund Misfires? - January 21, 2020

Zacks Equity Research

Does your current advisor have your money invested in these "Mutual Fund Misfires of the Market" that charge high fees for low returns? If so, it may be time for a new advisor.

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.

Brandes International Small Cap Equity C (BINCX): Expense ratio: 2.1%. Management fee: 0.95%. After expenses, the 5 year return is 1.2%, meaning your fees are far higher than the fund's returns.

PSI Tactical Growth Fund A (FXTAX): 1.9% expense ratio, 1% management fee. FXTAX is an Allocation Balanced mutual fund. Allocation Balanced funds look to invest across asset types, like stocks, bonds, and cash, and including precious metals or commodities is not unusual; these funds are mostly categorized by their respective asset allocation. This fund has an annual returns of -0.35% over the last five years. Another fund guilty of having investors pay more in fees than returns.

Oppenheimer SteelPath MLP Alpha A (MLPAX): This fund has an expense ratio of 1.54% and management fee of 1.1%. MLPAX is a Sector - Energy fund, which are comprised of various changing and hugely important industries throughout the massive global energy sector. With an annual average return of -6.91% 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.

American Funds Wash Mutl Invs R2E (RWEBX) is a fund that has an expense ratio of 1.09%, and a management fee of 0.23%. RWEBX is a Large Cap Value fund. These funds invest in stocks with a market cap of $10 billion of more, but whose share prices do not reflect their intrinsic value. With yearly returns of 10.11% over the last five years, this fund clearly wins.

TIAA-CREF Social Choice Equity Retirement (TRSCX): Expense ratio: 0.42%. Management fee: 0.15%. TRSCX is a Large Cap Blend fund, targeting companies with market caps of over $10 billion. These funds offer investors a stability, and are perfect for people with a "buy and hold" mindset. TRSCX has managed to produce a robust 10.43% over the last five years.

Principal Large Cap Growth I R6 (PLCGX) has an expense ratio of 0.59% and management fee of 0.6%. PLCGX 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. With annual returns of 15.39% over the last five years, this fund is a well-diversified fund with a long track record of success.

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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Zacks Investment Research