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Avoid These 3 Mutual Fund Misfires - November 22, 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.

High fees plus poor performance: It's a pretty simple formula for a bad mutual fund. Some are worse than others - and some are so bad that they have earned a "Strong Sell" on the Zacks Rank, the lowest ranking of the nearly 19,000 mutual funds we rank daily.

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.

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Leuthold Global Fund (GLBLX): This fund has an expense ratio of 1.88% and a management fee of 0.9%. 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. GLBLX 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.

Oppenheimer SteelPath MLP Alpha Y (MLPOX). Expense ratio: 1.29%. Management fee: 0.9%. Over the last 5 years, this fund has generated annual returns of -7.14%.

Virtus Equity Trend A (VAPAX) - 1.56% expense ratio, 1% management fee. This fund has yielded yearly returns of 0.59% in the course of the last five years. Too bad!

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.

Nuveen Winslow Large-Cap Growth R3 (NWCRX): 1.23% expense ratio and 0.69% management fee. NWCRX 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. With an annual return of 12.02% over the last five years, this fund is a winner.

Janus Henderson Enterprise T (JAENX) is a stand out fund. JAENX 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. With five-year annualized performance of 14.7% and expense ratio of 0.91%, this diversified fund is an attractive buy with a strong history of performance.

Fidelity Real Estate Investment (FRESX) has an expense ratio of 0.74% and management fee of 0.54%. Sector - Real Estate funds like FRESX are known to invest in real estate investment trusts (REITs). A popular income vehicle thanks to its taxation rules, a REIT is required to pay out at least 90% of its income annually to avoid double taxation. With annual returns of 10.48% 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.

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Zacks Investment Research