We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Avoid These 3 Mutual Fund Misfires - March 17, 2020
Read MoreHide Full Article
Does your current advisor have your money invested in these "Mutual Fund Misfires of the Market" that charge high fees for low returns? If so, it may be time for a new advisor.
How can you tell a good mutual fund from a bad one? It's pretty basic: If the fund has high fees and performs poorly, it's not good. Of course, there's a range - but when a mutual fund earns a Zacks Rank of #5 (Strong Sell) that means it's among the worst of roughly 19,000 funds we rate each day.
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 Corporate Bond B : This fund has an expense ratio of 2.61% and a management fee of 0.47%. 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. IBJBX is part of the Investment Grade Bond - Intermediate fund group. These mutual funds focus on the middle part of the curve, generally with bonds that usually mature in more than three years but less than 15 years. The fund has lagged performance-wise, so perhaps a simpler index future investing strategy might be more effective.
Davis Government Bond C (DGVCX - Free Report) : 1.8% expense ratio, 0.3% management fee. DGVCX 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. This fund has an annual returns of 0.05% over the last five years. Another fund guilty of having investors pay more in fees than returns.
Janus Henderson Europe Focus A (HFEAX - Free Report) : Expense ratio: 1.32%. Management fee: 0.98%. HFEAX is a Europe - Equity mutual fund investing in stocks across the vast European continent. With annual returns of just -0.15%, 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.
Principal Capital Appreciation R5 (PCAQX - Free Report) : 0.75% expense ratio and 0.47% management fee. PCAQX is a Large Cap Blend fund, targeting companies with market caps of over $10 billion. These funds offer investors a stability, and are perfect for people with a "buy and hold" mindset. With an annual return of 11.44% over the last five years, this fund is a winner.
Eaton Vance Tax-Managed Growth 1.0 (CAPEX - Free Report) has an expense ratio of 0.48% and management fee of 0.45%. CAPEX is a Large Cap Growth mutual fund, and these funds invest in many large U.S. firms that are projected to grow at a faster rate than their large-cap peers. Thanks to yearly returns of 10.98% over the last five years, CAPEX is an effectively diversified fund with a long reputation of solidly positive performance.
Neuberger Berman Mid Cap Growth R6 (NRMGX - Free Report) is an attractive fund with a five-year annualized return of 11.12% and an expense ratio of just 0.61%. NRMGX 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).
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
Avoid These 3 Mutual Fund Misfires - March 17, 2020
Does your current advisor have your money invested in these "Mutual Fund Misfires of the Market" that charge high fees for low returns? If so, it may be time for a new advisor.
How can you tell a good mutual fund from a bad one? It's pretty basic: If the fund has high fees and performs poorly, it's not good. Of course, there's a range - but when a mutual fund earns a Zacks Rank of #5 (Strong Sell) that means it's among the worst of roughly 19,000 funds we rate each day.
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 Corporate Bond B : This fund has an expense ratio of 2.61% and a management fee of 0.47%. 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. IBJBX is part of the Investment Grade Bond - Intermediate fund group. These mutual funds focus on the middle part of the curve, generally with bonds that usually mature in more than three years but less than 15 years. The fund has lagged performance-wise, so perhaps a simpler index future investing strategy might be more effective.
Davis Government Bond C (DGVCX - Free Report) : 1.8% expense ratio, 0.3% management fee. DGVCX 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. This fund has an annual returns of 0.05% over the last five years. Another fund guilty of having investors pay more in fees than returns.
Janus Henderson Europe Focus A (HFEAX - Free Report) : Expense ratio: 1.32%. Management fee: 0.98%. HFEAX is a Europe - Equity mutual fund investing in stocks across the vast European continent. With annual returns of just -0.15%, 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.
Principal Capital Appreciation R5 (PCAQX - Free Report) : 0.75% expense ratio and 0.47% management fee. PCAQX is a Large Cap Blend fund, targeting companies with market caps of over $10 billion. These funds offer investors a stability, and are perfect for people with a "buy and hold" mindset. With an annual return of 11.44% over the last five years, this fund is a winner.
Eaton Vance Tax-Managed Growth 1.0 (CAPEX - Free Report) has an expense ratio of 0.48% and management fee of 0.45%. CAPEX is a Large Cap Growth mutual fund, and these funds invest in many large U.S. firms that are projected to grow at a faster rate than their large-cap peers. Thanks to yearly returns of 10.98% over the last five years, CAPEX is an effectively diversified fund with a long reputation of solidly positive performance.
Neuberger Berman Mid Cap Growth R6 (NRMGX - Free Report) is an attractive fund with a five-year annualized return of 11.12% and an expense ratio of just 0.61%. NRMGX 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).
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.