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Avoid These 3 Mutual Fund Misfires - October 04, 2019
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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 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.
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.
AB Allocation Market Real Return R (AMTRX - Free Report) : This fund has an expense ratio of 1.54% and a management fee of 0.75%. Without even doing any in-depth analysis, just the fact that you are paying more in fees than you're earning in returns is reason enough not to invest. AMTRX is a part of the Allocation Balanced fund category; these funds like to invest in a variety of asset types, finding a balance between stocks, bonds, cash, and sometimes even precious metals and commodities; they are mostly categorized by their respective asset allocation. The fund has lagged performance-wise, so perhaps a simpler index future investing strategy might be more effective.
Columbia Disciplined Small Core Y : 0.93% expense ratio, 0.85%. CPFRX is a Small Cap Value mutual fund, investing in small companies with stock market valuation less than $2 billion. This fund has yearly returns of 0.88% over the most recent five years. Another fund liable of having investors pay more in charges than what they receive in return.
Hartford Global Real Asset R3 (HRLRX - Free Report) : This fund has an expense ratio of 1.5% and management fee of 0.85%. HRLRX 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 an annual average return of -2.76% 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
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.
DFA US Large Cap Growth Institutional (DUSLX - Free Report) : 0.2% expense ratio and 0.17% management fee. DUSLX 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. With an annual return of 11.74% over the last five years, this fund is a winner.
DoubleLine Shiller Enhanced CAPE I (DSEEX - Free Report) has an expense ratio of 0.55% and management fee of 0.45%. DSEEX 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 13.6% over the last five years, DSEEX is an effectively diversified fund with a long reputation of solidly positive performance.
Sands Capital Global Growth Investor (SCGVX - Free Report) has an expense ratio of 1.17% and management fee of 0.85%. SCGVX 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. With yearly returns of 10.81% over the last five years, this fund is well-diversified with a long reputation of salutary performance.
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.
If you have concerns or any doubts about your investment advisor, read our just-released report:
Image: Bigstock
Avoid These 3 Mutual Fund Misfires - October 04, 2019
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 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.
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.
AB Allocation Market Real Return R (AMTRX - Free Report) : This fund has an expense ratio of 1.54% and a management fee of 0.75%. Without even doing any in-depth analysis, just the fact that you are paying more in fees than you're earning in returns is reason enough not to invest. AMTRX is a part of the Allocation Balanced fund category; these funds like to invest in a variety of asset types, finding a balance between stocks, bonds, cash, and sometimes even precious metals and commodities; they are mostly categorized by their respective asset allocation. The fund has lagged performance-wise, so perhaps a simpler index future investing strategy might be more effective.
Columbia Disciplined Small Core Y : 0.93% expense ratio, 0.85%. CPFRX is a Small Cap Value mutual fund, investing in small companies with stock market valuation less than $2 billion. This fund has yearly returns of 0.88% over the most recent five years. Another fund liable of having investors pay more in charges than what they receive in return.
Hartford Global Real Asset R3 (HRLRX - Free Report) : This fund has an expense ratio of 1.5% and management fee of 0.85%. HRLRX 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 an annual average return of -2.76% 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
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.
DFA US Large Cap Growth Institutional (DUSLX - Free Report) : 0.2% expense ratio and 0.17% management fee. DUSLX 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. With an annual return of 11.74% over the last five years, this fund is a winner.
DoubleLine Shiller Enhanced CAPE I (DSEEX - Free Report) has an expense ratio of 0.55% and management fee of 0.45%. DSEEX 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 13.6% over the last five years, DSEEX is an effectively diversified fund with a long reputation of solidly positive performance.
Sands Capital Global Growth Investor (SCGVX - Free Report) has an expense ratio of 1.17% and management fee of 0.85%. SCGVX 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. With yearly returns of 10.81% over the last five years, this fund is well-diversified with a long reputation of salutary performance.
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.
If you have concerns or any doubts about your investment advisor, read our just-released report:
4 Warning Signs That Your Advisor Might be Sabotaging Your Financial Future