Are You Invested In These 3 Mutual Fund Misfires? - December 30, 2019

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.

High fees plus poor performance: It's a pretty simple formula for a bad mutual fund. Some are worse than others - and some are so bad that they have earned a "Strong Sell" on the Zacks Rank, the lowest ranking of the nearly 19,000 mutual funds we rank daily.

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.

Janus Henderson Emerging Markets I (HEMIX): 1.15% expense ratio and 1% management fee. HEMIX 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. With a five year after-expenses return of 0.64%, you're mostly paying more in fees than returns.

Great-West Templeton Global Bond (MXGBX). Expense ratio: 1.01%. Management fee: 1%. Over the last 5 years, this fund has generated annual returns of 0.39%.

Virtus Equity Trend A (VAPAX) - 1.56% expense ratio, 1% management fee. This fund has yielded yearly returns of 0.59% in the course of the last five years. Too bad!

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.

Boston Trust SmMid Cap Fund (BTSMX) is a winner, with an expense ratio of just 0.75% and a five-year annualized return track record of 10.91%.

Frontier MFG Global Equity Institutional (FMGEX): Expense ratio: 0.8%. Management fee: 0.8%. FMGEX 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. FMGEX has managed to produce a robust 10.91% over the last five years.

DoubleLine Shiller Enhanced CAPE I (DSEEX) has an expense ratio of 0.55% and management fee of 0.45%. DSEEX is part of the Large Cap Blend section, and these mutual funds most often invest in firms with a market capitalization of $10 billion or more. By investing in bigger companies, these funds offer more stability, and are often well-suited for investors with a "buy and hold" mindset. With annual returns of 13.96% over the last five years, this fund is a well-diversified fund with a long track record of success.

Bottom Line

We hope that your investment advisor (if you use one) has you invested in one or all of the top-ranked mutual funds we've reviewed. But if that is not the case, and your advisor has you invested in any of the funds on our "worst offender" list, it might be time to have a conversation or reconsider this vitally important relationship.

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