Back to top

Image: Bigstock

3 Mutual Fund Misfires To Avoid In Your Retirement Portfolio - November 13, 2019

Read MoreHide Full Article

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.

How can you tell a good mutual fund from a bad one? It's pretty basic: If the fund has high fees and performs poorly, it's not good. Of course, there's a range - but when a mutual fund earns a Zacks Rank of #5 (Strong Sell) that means it's among the worst of roughly 19,000 funds we rate each day.

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 Global Total Return A (TGTRX - Free Report) : 0.97% expense ratio and 0.61% management fee. TGTRX is classified as a Diversified Bonds fund, which offers exposure to a wide variety of fixed income types, stretching across various issuers, credit levels, and maturities. With a five year after-costs return of 0.43%, you're for the most part paying more in charges than returns.

AB Allocation Market Real Return R (AMTRX - Free Report) : 1.54% expense ratio, 0.75% management fee. AMTRX is classified as an Allocation Balanced fund, which seeks to invest in a balance of asset types, like stocks, bonds, and cash, and including precious metals or commodities is not unusual. This fund has an annual returns of -2.95% over the last five years. Another fund guilty of having investors pay more in fees than returns.

JPMorgan Research Market Neutral C (JMNCX - Free Report) : This fund has an expense ratio of 4.15% and management fee of 0.8%. JMNCX is a Market Neutral - Equity mutual fund. These portfolios usually hold 50% of their securities in a long position, as well as 50% in a short position. With an annual average return of -0.28% 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

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.

TIAA-CREF Real Estate Security Premier (TRRPX - Free Report) : 0.66% expense ratio and 0.48% management fee. Sector - Real Estate funds like TRRPX are known to invest in real estate investment trusts (REITs). A popular income vehicle thanks to its taxation rules, a REIT is required to pay out at least 90% of its income annually to avoid double taxation. With an annual return of 11.68% over the last five years, this fund is a winner.

Laudus US Large Cap Growth (LGILX - Free Report) : Expense ratio: 0.75%. Management fee: 0.63%. LGILX 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. LGILX has managed to produce a robust 13.28% over the last five years.

Akre Focus Retail (AKREX - Free Report) has an expense ratio of 1.32% and management fee of 0.9%. AKREX is a Mid Cap Growth mutual fund. Mid Cap Growth funds pick stocks--usually companies with a market cap between $2 billion and $10 billion--that demonstrate extensive growth opportunities for investors compared to their peers. With yearly returns of 16.33% 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.

Do You Know the Top 9 Retirement Investing Mistakes?

Whether you're planning to retire early or not, don't let investing mistakes derail your plans.

If you have $500,000 or more to invest and want to learn more, click the link to download our free report, 9 Retirement Mistakes that will Ruin Your Retirement.

Published in