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3 Mutual Fund Misfires To Avoid In Your Retirement Portfolio - November 14, 2019

Zacks Equity Research

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.

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Clearbridge International Value I (SBIYX): 0.9% expense ratio and 0.75% management fee. SBIYX 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. With a five year after-costs return of -1.39%, you're for the most part paying more in charges than returns.

ProFunds Oil Equipment Service Class & Distribution Investor (OEPIX). Expense ratio: 2.09%. Management fee: 0.75%. Over the last 5 years, this fund has generated annual returns of -32.39%.

Gabelli Focus Five Fund A (GWSAX): Expense ratio: 1.71%. Management fee: 1%. GWSAX is a Small Cap Value fund, and these funds are known for investing in companies with market caps under $2 billion. With annual returns of just -2.3%, 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.

TIAA-CREF Enhanced Large Cap Growth Index Institutional (TLIIX): Expense ratio: 0.33%. Management fee: 0.3%. TLIIX 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. This fund has achieved five-year annual returns of an astounding 12.9%.

Hennessy Focus Fund Institutional (HFCIX) is a stand out fund. HFCIX is a Mid Cap Growth mutual fund. These mutual funds choose companies with a stock market valuation between $2 billion and $10 billion. With five-year annualized performance of 11.06% and expense ratio of 1.11%, this diversified fund is an attractive buy with a strong history of performance.

Victory RS Science&Technology Y (RIFYX) is an attractive fund with a five-year annualized return of 17.46% and an expense ratio of just 1.24%. RIFYX is part of the Sector - Tech mutual fund category that invests in technology and lets investors own a stake in a notoriously volatile sector, but with a much more diversified approach.

Bottom Line

Along these lines, there you have it - if your financial guide has you put your money into any of our "Mutual Fund Misfires of the Market," there is a strong likelihood that they are either dormant at the worst possible time, inept, or (in all probability) filling their pockets with high fee commissions at the cost of your financial objectives.

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Zacks Investment Research