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Avoid These 3 Mutual Fund Misfires - October 16, 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.
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.
Aquila Hawaiian Tax Free Trust C (HULCX - Free Report) : Expense ratio: 1.65%. Management fee: 0.23%. After expenses, the 5 year return is 1.04%, meaning your fees are far higher than the fund's returns.
Hodges Fund (HDPMX - Free Report) : HDPMX is a Mid Cap Blend mutual fund that typically features a portfolio filled with stocks of various sizes and styles; it allows for a diversification strategy focusing on companies with market caps between $2 billion and $10 billion. HDPMX offers an expense ratio of 1.18% and annual returns of 0.85% over the last five years. Even if this fund can be positioned as a hedge during the recent bull-market, paying more in fees than returns over the long-term should never be an acceptable result.
Rational Dividend Capture Institutional (HDCTX - Free Report) - 1% expense ratio, 0.75% management fee. This fund has yielded yearly returns of -0.35% in the course of the last five years. Too bad!
3 Top Ranked Mutual Funds
Now that you've seen the worst Zacks Ranked mutual funds, let's have a look at some of the highest ranked funds with the lowest fees.
Davenport Equity Opportunities Fund (DEOPX - Free Report) is a winner, with an expense ratio of just 0.91% and a five-year annualized return track record of 10.54%.
Principal Capital Appreciation R1 (PCAMX - Free Report) : Expense ratio: 1.37%. Management fee: 0.47%. PCAMX 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. PCAMX has managed to produce a robust 10.21% over the last five years.
Victory Sycamore Established Value I (VEVIX - Free Report) has an expense ratio of 0.61% and management fee of 0.45%. VEVIX, an All Cap Value option, is a type of mutual fund that buys stakes in companies in all three valuation categories. With yearly returns of 10.85% 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:
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Avoid These 3 Mutual Fund Misfires - October 16, 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.
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.
Aquila Hawaiian Tax Free Trust C (HULCX - Free Report) : Expense ratio: 1.65%. Management fee: 0.23%. After expenses, the 5 year return is 1.04%, meaning your fees are far higher than the fund's returns.
Hodges Fund (HDPMX - Free Report) : HDPMX is a Mid Cap Blend mutual fund that typically features a portfolio filled with stocks of various sizes and styles; it allows for a diversification strategy focusing on companies with market caps between $2 billion and $10 billion. HDPMX offers an expense ratio of 1.18% and annual returns of 0.85% over the last five years. Even if this fund can be positioned as a hedge during the recent bull-market, paying more in fees than returns over the long-term should never be an acceptable result.
Rational Dividend Capture Institutional (HDCTX - Free Report) - 1% expense ratio, 0.75% management fee. This fund has yielded yearly returns of -0.35% in the course of the last five years. Too bad!
3 Top Ranked Mutual Funds
Now that you've seen the worst Zacks Ranked mutual funds, let's have a look at some of the highest ranked funds with the lowest fees.
Davenport Equity Opportunities Fund (DEOPX - Free Report) is a winner, with an expense ratio of just 0.91% and a five-year annualized return track record of 10.54%.
Principal Capital Appreciation R1 (PCAMX - Free Report) : Expense ratio: 1.37%. Management fee: 0.47%. PCAMX 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. PCAMX has managed to produce a robust 10.21% over the last five years.
Victory Sycamore Established Value I (VEVIX - Free Report) has an expense ratio of 0.61% and management fee of 0.45%. VEVIX, an All Cap Value option, is a type of mutual fund that buys stakes in companies in all three valuation categories. With yearly returns of 10.85% 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