Avoid These 3 Mutual Fund Misfires - February 03, 2020

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.

Templeton Frontier Markets C (FFRMX): This fund has an expense ratio of 2.71% and a management fee of 1.4%. 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. FFRMX is a Non US - Equity fund. Many of these funds like to allocate across emerging and developed markets, and will often focus on all cap levels. The fund has lagged performance-wise, so perhaps a simpler index future investing strategy might be more effective.

First Investor International Opportunities Bond Adviser (FIODX). Expense ratio: 1.08%. Management fee: 1.4%. Over the last 5 years, this fund has generated annual returns of -0.45%.

Snow Capital Small Cap Value C (SNWCX): Expense ratio: 2.24%. Management fee: 0.95%. SNWCX is a Small Cap Value mutual fund option, which typically invest in companies with market caps under $2 billion. With annual returns of just -0.6%, 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.

Dreyfus US Equity Fund I (DPUIX) is a fund that has an expense ratio of 0.82%, and a management fee of 0.75%. DPUIX 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 yearly returns of 11.74% over the last five years, this fund clearly wins.

TIAA-CREF Socl Choice Equity Retail (TICRX) has an expense ratio of 0.45% and management fee of 0.15%. TICRX is classified as a Large Cap Blend fund. More often than not, Large Cap Blend mutual funds invest in companies with a market cap of over $10 billion. Buying stakes in bigger companies offer these funds more stability, and are well-suited for investors with a "buy and hold" mindset. Thanks to yearly returns of 10.41% over the last five years, TICRX is an effectively diversified fund with a long reputation of solidly positive performance.

Hartford Mid Cap Fund HLS IA (HIMCX) has an expense ratio of 0.7% and management fee of 0.66%. HIMCX is a Mid Cap Blend mutual fund that typically features a portfolio filled with stocks of various sizes and styles; it allows for a diversification strategy focusing on companies with market caps between $2 billion and $10 billion. With annual returns of 11.74% over the last five years, this fund is a well-diversified fund with a long track record of success.

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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