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3 Mutual Fund Misfires To Avoid In Your Retirement Portfolio - December 12, 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.
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.
Eaton Vance Government Obligation R (ERGOX - Free Report) : 1.45% expense ratio and 0.65% management fee. ERGOX is part of the Government Mortgage - Short fund section. Government Mortgage - Short funds focus on the mortgage-backed security (MBS) market and securities that usually have less than three years until maturity. With a five year after-expenses return of 0.73%, you're mostly paying more in fees than returns.
American Funds ST Bond Fund of America R1 (RAMAX - Free Report) : 1.45% expense ratio, 0.27%. RAMAX is part of the Government Bond - Short fund category. Often seen as risk-free assets, these funds hold securities issued by the U.S. federal government and they focus on the short end of the curve. This fund has yearly returns of 0.31% over the most recent five years. Another fund liable of having investors pay more in charges than what they receive in return.
Templeton Emerging Markets Small Cap C (TCEMX - Free Report) : Expense ratio: 2.67%. Management fee: 1.35%. TCEMX is a Non US - Equity fund. Many of these funds like to allocate across emerging and developed markets, and will often focus on all cap levels. With annual returns of just 0.05%, it's no surprise this fund has received Zacks' "Strong Sell" ranking.
3 Top Ranked Mutual Funds
Since you've seen the most noticeably lowest Zacks Ranked mutual funds, how about we take a look at some of the top ranked mutual funds with the least fees.
American Century NT Heritage Institutional is a fund that has an expense ratio of 0.65%, and a management fee of 0.65%. ACLWX is categorized as an All Cap Value fund, and like the name suggests, invests across the cap spectrum in small-cap, mid-cap, and large-cap companies. With yearly returns of 10.73% over the last five years, this fund clearly wins.
T. Rowe Price Capital Opportunity A (PACOX - Free Report) is a stand out fund. PACOX is classified as a Large Cap Blend fund. More often than not, Large Cap Blend mutual funds invest in companies with a market cap of over $10 billion. Buying stakes in bigger companies offer these funds more stability, and are well-suited for investors with a "buy and hold" mindset. With five-year annualized performance of 10.88% and expense ratio of 0.93%, this diversified fund is an attractive buy with a strong history of performance.
Brown Advisory Flexible Equity Adviser (BAFAX - Free Report) has an expense ratio of 0.97% and management fee of 0.44%. BAFAX 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 10.1% over the last five years, this fund is a well-diversified fund with a long track record of success.
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.
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.
Image: Bigstock
3 Mutual Fund Misfires To Avoid In Your Retirement Portfolio - December 12, 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.
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.
Eaton Vance Government Obligation R (ERGOX - Free Report) : 1.45% expense ratio and 0.65% management fee. ERGOX is part of the Government Mortgage - Short fund section. Government Mortgage - Short funds focus on the mortgage-backed security (MBS) market and securities that usually have less than three years until maturity. With a five year after-expenses return of 0.73%, you're mostly paying more in fees than returns.
American Funds ST Bond Fund of America R1 (RAMAX - Free Report) : 1.45% expense ratio, 0.27%. RAMAX is part of the Government Bond - Short fund category. Often seen as risk-free assets, these funds hold securities issued by the U.S. federal government and they focus on the short end of the curve. This fund has yearly returns of 0.31% over the most recent five years. Another fund liable of having investors pay more in charges than what they receive in return.
Templeton Emerging Markets Small Cap C (TCEMX - Free Report) : Expense ratio: 2.67%. Management fee: 1.35%. TCEMX is a Non US - Equity fund. Many of these funds like to allocate across emerging and developed markets, and will often focus on all cap levels. With annual returns of just 0.05%, it's no surprise this fund has received Zacks' "Strong Sell" ranking.
3 Top Ranked Mutual Funds
Since you've seen the most noticeably lowest Zacks Ranked mutual funds, how about we take a look at some of the top ranked mutual funds with the least fees.
American Century NT Heritage Institutional is a fund that has an expense ratio of 0.65%, and a management fee of 0.65%. ACLWX is categorized as an All Cap Value fund, and like the name suggests, invests across the cap spectrum in small-cap, mid-cap, and large-cap companies. With yearly returns of 10.73% over the last five years, this fund clearly wins.
T. Rowe Price Capital Opportunity A (PACOX - Free Report) is a stand out fund. PACOX is classified as a Large Cap Blend fund. More often than not, Large Cap Blend mutual funds invest in companies with a market cap of over $10 billion. Buying stakes in bigger companies offer these funds more stability, and are well-suited for investors with a "buy and hold" mindset. With five-year annualized performance of 10.88% and expense ratio of 0.93%, this diversified fund is an attractive buy with a strong history of performance.
Brown Advisory Flexible Equity Adviser (BAFAX - Free Report) has an expense ratio of 0.97% and management fee of 0.44%. BAFAX 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 10.1% over the last five years, this fund is a well-diversified fund with a long track record of success.
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.
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.