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Are You Invested In These 3 Mutual Fund Misfires? - December 20, 2019

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.

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.

Templeton Foreign R (TEFRX): 1.33% expense ratio and 0.69% management fee. TEFRX is a Non US - Equity option, focusing their investments acoss emerging and developed markets, and can often extend across cap levels too. With a five year after-costs return of -1.04%, you're for the most part paying more in charges than returns.

Lord Abbett Inflation Focused R3 (LIFRX): 0.98% expense ratio, 0.3%. LIFRX is classified as a Government - Bonds fund. These funds hold securities issued by the U.S. federal government in their portfolios, and focus across the curve, meaning the yields and interest rate sensitivity will vary. This fund has yearly returns of -0.45% over the most recent five years. Another fund liable of having investors pay more in charges than what they receive in return.

ProFunds UltraSector Oil & Gas Investor (ENPIX) - 1.74% expense ratio, 0.75% management fee. ENPIX is a Sector - Energy mutual fund, which encompasses a wide range of vastly changing and vitally important industries throughout this massive global sector. ENPIX has generated annual returns of -13.39% over the last five years. Ouch!

3 Top Ranked Mutual Funds

There you have it: some prime examples of truly bad mutual funds. In contrast, here are a few funds that have achieved high Zacks Ranks and have low fees.

Janus Henderson Enterprise Institutional (JAAGX): 0.72% expense ratio and 0.64% management fee. JAAGX 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 an annual return of 15.42% over the last five years, this fund is a winner.

Jensen Quality Growth Fund I (JENIX) is a stand out fund. JENIX 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 five-year annualized performance of 13.54% and expense ratio of 0.61%, this diversified fund is an attractive buy with a strong history of performance.

Fidelity Small Cap Growth (FCPGX): Expense ratio: 1.04%. Management fee: 0.84%. FCPGX is a Small Cap Growth mutual fund building their portfolio around stocks with market caps under $2 billion and large growth opportunities. FCPGX has produced a 14.27% over the last five years.

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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