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Avoid These 3 Mutual Fund Misfires - October 14, 2019
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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.
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.
BNY Mellon International Equity Income Investor : This fund has an expense ratio of 1.34% and a management fee of 0.85%. 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. MLIIX is a Non US - Equity option, focusing their investments acoss emerging and developed markets, and can often extend across cap levels too. The fund has lagged performance-wise, so perhaps a simpler index future investing strategy might be more effective.
Lord Abbett Inflation Focused I (LIFIX - Free Report) : 0.48% expense ratio, 0.3%. LIFIX is a Government - Bonds option, and holds securities issued by the U.S. federal government in their portfolios; these funds focus across the curve, meaning the yields and interest rate sensitivity will vary. This fund has yearly returns of 0.05% over the most recent five years. Another fund liable of having investors pay more in charges than what they receive in return.
Highland Energy MLP Fund Y : Expense ratio: 0.01%. Management fee: 1%. HEFYX is a Sector - Energy mutual fund, which encompasses a wide range of vastly changing and vitally important industries throughout this massive global sector. With annual returns of just -18.09%, it's no surprise this fund has received Zacks' "Strong Sell" ranking.
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.
Victory Sycamore Established Value R6 (VEVRX - Free Report) : Expense ratio: 0.58%. Management fee: 0.45%. VEVRX is an All Cap Value mutual fund, which invests in small, medium, and large-cap companies, though they end up focusing on bigger firms due to percentage of assets. This fund has achieved five-year annual returns of an astounding 10.57%.
ClearBridge Dividend Strategy 1 (LCBOX - Free Report) has an expense ratio of 0.77% and management fee of 0.65%. LCBOX 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. With annual returns of 10.33% over the last five years, this is a well-diversified fund with a long track record of success.
AQR Large Cap Defensive Style R6 (QUERX - Free Report) : Expense ratio: 0.3%. Management fee: 0.25%. QUERX 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. QUERX has produced a 14.03% over the last five years.
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 14, 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.
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.
BNY Mellon International Equity Income Investor : This fund has an expense ratio of 1.34% and a management fee of 0.85%. 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. MLIIX is a Non US - Equity option, focusing their investments acoss emerging and developed markets, and can often extend across cap levels too. The fund has lagged performance-wise, so perhaps a simpler index future investing strategy might be more effective.
Lord Abbett Inflation Focused I (LIFIX - Free Report) : 0.48% expense ratio, 0.3%. LIFIX is a Government - Bonds option, and holds securities issued by the U.S. federal government in their portfolios; these funds focus across the curve, meaning the yields and interest rate sensitivity will vary. This fund has yearly returns of 0.05% over the most recent five years. Another fund liable of having investors pay more in charges than what they receive in return.
Highland Energy MLP Fund Y : Expense ratio: 0.01%. Management fee: 1%. HEFYX is a Sector - Energy mutual fund, which encompasses a wide range of vastly changing and vitally important industries throughout this massive global sector. With annual returns of just -18.09%, it's no surprise this fund has received Zacks' "Strong Sell" ranking.
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.
Victory Sycamore Established Value R6 (VEVRX - Free Report) : Expense ratio: 0.58%. Management fee: 0.45%. VEVRX is an All Cap Value mutual fund, which invests in small, medium, and large-cap companies, though they end up focusing on bigger firms due to percentage of assets. This fund has achieved five-year annual returns of an astounding 10.57%.
ClearBridge Dividend Strategy 1 (LCBOX - Free Report) has an expense ratio of 0.77% and management fee of 0.65%. LCBOX 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. With annual returns of 10.33% over the last five years, this is a well-diversified fund with a long track record of success.
AQR Large Cap Defensive Style R6 (QUERX - Free Report) : Expense ratio: 0.3%. Management fee: 0.25%. QUERX 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. QUERX has produced a 14.03% over the last five years.
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