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Are You Invested In These 3 Mutual Fund Misfires? - October 22, 2019
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You may need to start looking for a new financial advisor if your current one has put any of these high-fee, low-return "Mutual Fund Misfires of the Market" into your portfolio.
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.
Templeton Growth R (TEGRX - Free Report) : Expense ratio: 1.28%. Management fee: 0.68%. After expenses, the 5 year return is 0.96%, meaning your fees are far higher than the fund's returns.
JPMorgan International Value Fund A (JFEAX - Free Report) : 1.01% expense ratio, 0.6% management fee. JFEAX is a part of the Non US - Equity fund category, many of which will focus across all cap levels, and will typically allocate their investments between emerging and developed markets. This fund has an annual returns of -1.4% over the last five years. Another fund guilty of having investors pay more in fees than returns.
ProFunds Biotech Ultra Sector Service Class (BIPSX - Free Report) : Expense ratio: 2.45%. Management fee: 0.75%. BIPSX is part of the Sector - Health category, offering investors a focus on the healthcare industry, one of the largest sectors in the American economy. With annual returns of just -0.97%, it's no surprise this fund has received Zacks' "Strong Sell" ranking.
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 Advisor Semiconductors I (FELIX - Free Report) : 0.84% expense ratio and 0.54% management fee. With a much more diversified approach, FELIX--part of the Sector - Tech mutual fund category--gives investors a way to own a stake in the notoriously risky tech sector. With an annual return of 19.38% over the last five years, this fund is a winner.
Principal Mid Cap R2 has an expense ratio of 1.34% and management fee of 0.58%. PMBNX 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 annual returns of 12.74% over the last five years, this is a well-diversified fund with a long track record of success.
MFS Mass Investors Growth Stock C (MIGDX - Free Report) has an expense ratio of 1.48% and management fee of 0.33%. MIGDX 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 yearly returns of 12.76% over the last five years, this fund is well-diversified with a long reputation of salutary performance.
Bottom Line
These examples underscore the huge range in quality of mutual funds - from the really bad to the astonishingly good. There is no reason for your advisor to keep your money in any fund that charges more than you get in return (unless they're getting something out of it, like a high commission).
If you have concerns or any doubts about your investment advisor, read our just-released report:
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Are You Invested In These 3 Mutual Fund Misfires? - October 22, 2019
You may need to start looking for a new financial advisor if your current one has put any of these high-fee, low-return "Mutual Fund Misfires of the Market" into your portfolio.
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.
Templeton Growth R (TEGRX - Free Report) : Expense ratio: 1.28%. Management fee: 0.68%. After expenses, the 5 year return is 0.96%, meaning your fees are far higher than the fund's returns.
JPMorgan International Value Fund A (JFEAX - Free Report) : 1.01% expense ratio, 0.6% management fee. JFEAX is a part of the Non US - Equity fund category, many of which will focus across all cap levels, and will typically allocate their investments between emerging and developed markets. This fund has an annual returns of -1.4% over the last five years. Another fund guilty of having investors pay more in fees than returns.
ProFunds Biotech Ultra Sector Service Class (BIPSX - Free Report) : Expense ratio: 2.45%. Management fee: 0.75%. BIPSX is part of the Sector - Health category, offering investors a focus on the healthcare industry, one of the largest sectors in the American economy. With annual returns of just -0.97%, it's no surprise this fund has received Zacks' "Strong Sell" ranking.
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 Advisor Semiconductors I (FELIX - Free Report) : 0.84% expense ratio and 0.54% management fee. With a much more diversified approach, FELIX--part of the Sector - Tech mutual fund category--gives investors a way to own a stake in the notoriously risky tech sector. With an annual return of 19.38% over the last five years, this fund is a winner.
Principal Mid Cap R2 has an expense ratio of 1.34% and management fee of 0.58%. PMBNX 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 annual returns of 12.74% over the last five years, this is a well-diversified fund with a long track record of success.
MFS Mass Investors Growth Stock C (MIGDX - Free Report) has an expense ratio of 1.48% and management fee of 0.33%. MIGDX 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 yearly returns of 12.76% over the last five years, this fund is well-diversified with a long reputation of salutary performance.
Bottom Line
These examples underscore the huge range in quality of mutual funds - from the really bad to the astonishingly good. There is no reason for your advisor to keep your money in any fund that charges more than you get in return (unless they're getting something out of it, like a high commission).
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