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Avoid These 3 Mutual Fund Misfires - October 31, 2019
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If your advisor has you invested in any of these "Mutual Fund Misfires of the Market" with high fees and low returns, you need to rethink your advisor.
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.
Ivy Natural Resources B : 3.01% expense ratio and 0.85% management fee. IGNBX is classified as a Sector - Energy mutual fund. Throughout the massive global energy sector, these funds hold a wide range of quickly changing and vitally important industries. With a five year after-costs return of -10.09%, you're for the most part paying more in charges than returns.
Thornburg Limited Term Municipal CA C (LTCCX - Free Report) : LTCCX is a Muni - Bonds fund; these funds invest in debt securities issued by states and local municipalities, which are typically used to pay for infrastructure construction, schools, and other government functions. LTCCX offers an expense ratio of 1.21% and annual returns of 0.96% 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.
SEI Multi-Asset Real Return Fund A (SEIAX - Free Report) - 1% expense ratio, 0.55% management fee. This fund has yielded yearly returns of -0.97% in the course of the last five years. Too bad!
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) is a fund that has an expense ratio of 0.58%, and a management fee of 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. With yearly returns of 10.57% over the last five years, this fund clearly wins.
MFS Mass Investors Growth Stock B (MIGBX - Free Report) has an expense ratio of 1.47% and management fee of 0.33%. MIGBX 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. Thanks to yearly returns of 12.32% over the last five years, MIGBX is an effectively diversified fund with a long reputation of solidly positive performance.
BlackRock Advantage Large Cap Growth I (CMVIX - Free Report) is an attractive fund with a five-year annualized return of 10.97% and an expense ratio of just 0.62%. CMVIX is a Mid Cap Growth mutual fund. These funds aim to target companies with a market capitalization between $2 billion and $10 billion that are also expected to exhibit more extensive growth opportunities for investors than their peers.
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:
Image: Bigstock
Avoid These 3 Mutual Fund Misfires - October 31, 2019
If your advisor has you invested in any of these "Mutual Fund Misfires of the Market" with high fees and low returns, you need to rethink your advisor.
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.
Ivy Natural Resources B : 3.01% expense ratio and 0.85% management fee. IGNBX is classified as a Sector - Energy mutual fund. Throughout the massive global energy sector, these funds hold a wide range of quickly changing and vitally important industries. With a five year after-costs return of -10.09%, you're for the most part paying more in charges than returns.
Thornburg Limited Term Municipal CA C (LTCCX - Free Report) : LTCCX is a Muni - Bonds fund; these funds invest in debt securities issued by states and local municipalities, which are typically used to pay for infrastructure construction, schools, and other government functions. LTCCX offers an expense ratio of 1.21% and annual returns of 0.96% 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.
SEI Multi-Asset Real Return Fund A (SEIAX - Free Report) - 1% expense ratio, 0.55% management fee. This fund has yielded yearly returns of -0.97% in the course of the last five years. Too bad!
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) is a fund that has an expense ratio of 0.58%, and a management fee of 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. With yearly returns of 10.57% over the last five years, this fund clearly wins.
MFS Mass Investors Growth Stock B (MIGBX - Free Report) has an expense ratio of 1.47% and management fee of 0.33%. MIGBX 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. Thanks to yearly returns of 12.32% over the last five years, MIGBX is an effectively diversified fund with a long reputation of solidly positive performance.
BlackRock Advantage Large Cap Growth I (CMVIX - Free Report) is an attractive fund with a five-year annualized return of 10.97% and an expense ratio of just 0.62%. CMVIX is a Mid Cap Growth mutual fund. These funds aim to target companies with a market capitalization between $2 billion and $10 billion that are also expected to exhibit more extensive growth opportunities for investors than their peers.
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