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Mutual Fund Misfires of the Market - December 16, 2019

Zacks Equity Research

If your financial advisor made you buy any of these "Mutual Fund Misfires of the Market" with high expenses and low returns, you need to reassess your advisor.

High fees coupled with poor results: It's a straightforward equation for an awful mutual fund. Some are more regrettable than others - and some are bad to the point that they have got a "Strong Sell" from our Zacks Rank, the lowest positioning of the almost 19,000 mutual funds we rank every day.

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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Invesco Gold & Precious Metals C (IGDCX): Expense ratio: 2.22%. Management fee: 0.75%. After expenses, the 5 year return is -0.47%, meaning your fees are far higher than the fund's returns.

Goldman Sachs N-11 Equity Fund IR (GSYRX): 1.48% expense ratio, 1.13% management fee. GSYRX 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 an annual returns of -5.41% over the last five years. Another fund guilty of having investors pay more in fees than returns.

ProFunds Pharm UltraSector Investor (PHPIX) - 1.86% expense ratio, 0.75% management fee. PHPIX is part of the Sector - Health category, offering investors a focus on the healthcare industry, one of the largest sectors in the American economy. PHPIX has generated annual returns of 0.14% over the last five years. Ouch!

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.

T. Rowe Price Mid-Cap Growth R (RRMGX) is a winner, with an expense ratio of just 1.27% and a five-year annualized return track record of 12.58%.

Principal Large Cap Growth I R2 (PPUNX) has an expense ratio of 1.34% and management fee of 0.6%. PPUNX 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. Thanks to yearly returns of 10.55% over the last five years, PPUNX is an effectively diversified fund with a long reputation of solidly positive performance.

Harbor Large Cap Value Investor (HILVX) has an expense ratio of 1.05% and management fee of 0.6%. HILVX is a part of the Large Cap Value category, and invests in equities with a market capitalization of $10 billion or more, but whose share prices do not reflect their intrinsic value. With yearly returns of 10.75% over the last five years, this fund is well-diversified with a long reputation of salutary performance.

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