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3 Mutual Fund Misfires To Avoid In Your Retirement Portfolio - November 27, 2019

Zacks Equity Research

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.

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.

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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AB Unconstrained Bond C (AGCCX): 1.65% expense ratio and 0.5% management fee. AGCCX is a Diversified Bonds investment option; these funds give investors exposure to a variety of fixed income types that span across different issuers, maturities, and credit levels. With a five year after-expenses return of -0.3%, you're mostly paying more in fees than returns.

Thomas White International Fund (TWWDX). Expense ratio: 1.24%. Management fee: 0.5%. Over the last 5 years, this fund has generated annual returns of 1.01%.

Templeton Global Bond C (TEGBX): This fund has an expense ratio of 1.27% and management fee of 0.48%. TEGBX is an International Bond - Developed fund, and these funds funds focus on fixed income securities from developed nations apart from the United States. This usually results in countries like Japan, Germany, the UK, France, and Australia dominating the list of top holdings. With an annual average return of 0.13% over the last five years, the only thing absolute about this absolute return fund is that it absolutely deserves to be on our "worst offender" list.

3 Top Ranked Mutual Funds

Now that you've seen the worst Zacks Ranked mutual funds, let's have a look at some of the highest ranked funds with the lowest fees.

T. Rowe Price Financial Services (PRISX): 0.84% expense ratio and 0.64% management fee. Sector - Finance funds offer a stable, diversified approach to investing that focuses on the financial industry, an infamously large, complex, and heavily-regulated space. With an annual return of 10.15% over the last five years, this fund is a winner.

AQR Large Cap Momentum Style I (AMOMX) has an expense ratio of 0.4% and management fee of 0.25%. AMOMX 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 10.22% over the last five years, AMOMX is an effectively diversified fund with a long reputation of solidly positive performance.

BlackRock Advantage Large Cap Growth S (CMVSX): Expense ratio: 0.87%. Management fee: 0.57%. CMVSX 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. CMVSX has produced a 10.64% over the last five years.

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