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Avoid These 3 Mutual Fund Misfires - January 09, 2020
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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.
High fees coupled with poor results: It's a straightforward equation for an awful mutual fund. Some are more regrettable than others - and some are bad to the point that they have got a "Strong Sell" from our Zacks Rank, the lowest positioning of the almost 19,000 mutual funds we rank every day.
Below, you'll read about some of the funds included in our current list of "Mutual Fund Misfires of the Market." And if by chance you're invested in any of these misfires, we'll help and review some of our highest Zacks Ranked mutual funds.
3 Mutual Fund Misfires
Now, let's take a look at three market misfires.
MainStay Emerging Markets Opportunity A : This fund has an expense ratio of 1.82% and a management fee of 1%. 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. MEOAX 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.
Leader Total Return C . Expense ratio: 2.96%. Management fee: 1%. Over the last 5 years, this fund has generated annual returns of 0.25%.
Catalyst Hedged Futures Strategy A - 2.33% expense ratio, 1.75% management fee. HFXAX is a Long Short - Equity option. These funds' investment strategy consists of minimizing overall market exposure, while at the same time taking long positions in equities that are expected to appreciate and short positions in equities that are projected to decline. HFXAX has generated annual returns of -5.16% over the last five years. Ouch!
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.
AQR Large Cap Defensive Style N (AUENX - Free Report) : Expense ratio: 0.65%. Management fee: 0.25%. AUENX 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. This fund has achieved five-year annual returns of an astounding 13.62%.
Putnam Growth Opportunities R6 (PGOEX - Free Report) : Expense ratio: 0.66%. Management fee: 0.58%. PGOEX 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. PGOEX has managed to produce a robust 13.93% over the last five years.
MassMutual Select Small Cap Growth Equity I (MSGZX - Free Report) : Expense ratio: 0.86%. Management fee: 0.8%. MSGZX is a Small Cap Growth mutual fund and tends to feature small companies in up-and-coming industries and markets. MSGZX has produced a 10.65% over the last five years.
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).
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.
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Avoid These 3 Mutual Fund Misfires - January 09, 2020
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.
High fees coupled with poor results: It's a straightforward equation for an awful mutual fund. Some are more regrettable than others - and some are bad to the point that they have got a "Strong Sell" from our Zacks Rank, the lowest positioning of the almost 19,000 mutual funds we rank every day.
Below, you'll read about some of the funds included in our current list of "Mutual Fund Misfires of the Market." And if by chance you're invested in any of these misfires, we'll help and review some of our highest Zacks Ranked mutual funds.
3 Mutual Fund Misfires
Now, let's take a look at three market misfires.
MainStay Emerging Markets Opportunity A : This fund has an expense ratio of 1.82% and a management fee of 1%. 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. MEOAX 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.
Leader Total Return C . Expense ratio: 2.96%. Management fee: 1%. Over the last 5 years, this fund has generated annual returns of 0.25%.
Catalyst Hedged Futures Strategy A - 2.33% expense ratio, 1.75% management fee. HFXAX is a Long Short - Equity option. These funds' investment strategy consists of minimizing overall market exposure, while at the same time taking long positions in equities that are expected to appreciate and short positions in equities that are projected to decline. HFXAX has generated annual returns of -5.16% over the last five years. Ouch!
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.
AQR Large Cap Defensive Style N (AUENX - Free Report) : Expense ratio: 0.65%. Management fee: 0.25%. AUENX 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. This fund has achieved five-year annual returns of an astounding 13.62%.
Putnam Growth Opportunities R6 (PGOEX - Free Report) : Expense ratio: 0.66%. Management fee: 0.58%. PGOEX 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. PGOEX has managed to produce a robust 13.93% over the last five years.
MassMutual Select Small Cap Growth Equity I (MSGZX - Free Report) : Expense ratio: 0.86%. Management fee: 0.8%. MSGZX is a Small Cap Growth mutual fund and tends to feature small companies in up-and-coming industries and markets. MSGZX has produced a 10.65% over the last five years.
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).
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.