Mutual Fund Misfires of the Market - October 04, 2019

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.

Hartford Global Real Asset R4 (HRLSX): 1.2% expense ratio and 0.85% management fee. HRLSX is a Global - Equity mutual fund investing in bigger markets like the U.S., Europe, and Japan; these kinds of funds aren't limited by geography. With a five year after-expenses return of -2.47%, you're mostly paying more in fees than returns.

AB Allocation Market Real Return K (AMTKX). Expense ratio: 1.27%. Management fee: 0.85%. Over the last 5 years, this fund has generated annual returns of -4.16%.

Hussman Strategic International Equity Fund (HSIEX) - 2% expense ratio, 0.95% management fee. This fund has yielded yearly returns of -4.11% 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.

Fidelity Series Growth Company (FCGSX): Expense ratio: 0.01%. Management fee: 0%. FCGSX 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. This fund has achieved five-year annual returns of an astounding 14.79%.

DoubleLine Shiller Enhanced CAPE N (DSENX) has an expense ratio of 0.8% and management fee of 0.45%. DSENX 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. Thanks to yearly returns of 13.31% over the last five years, DSENX is an effectively diversified fund with a long reputation of solidly positive performance.

MassMutual Select Small Cap Growth Equity I (MSGZX): Expense ratio: 0.86%. Management fee: 0.8%. MSGZX is a Small Cap Growth mutual fund and tends to feature small companies in up-and-coming industries and markets. MSGZX has produced a 10.2% over the last five years.

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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