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Are You Invested In These 3 Mutual Fund Misfires? - November 04, 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.

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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Matthews Korea Fund (MAKOX): 1.18% expense ratio and 0.66% management fee. MAKOX is a Pacific Rim - Equity mutual fund; these funds typically invest in companies throughout the dominant export-focused markets of Hong Kong, Singapore, Taiwan, and Korea. With a five year after-costs return of 0.98%, you're for the most part paying more in charges than returns.

Templeton Foreign C (TEFTX): 1.81% expense ratio, 0.69%. TEFTX 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. This fund has yearly returns of -1.5% over the most recent five years. Another fund liable of having investors pay more in charges than what they receive in return.

Rational Dividend Capture Institutional (HDCTX): This fund has an expense ratio of 1% and management fee of 0.75%. HDCTX is a part of the Large Cap Value category, and invests in equities with a market capitalization of $10 billion or more, but whose share prices do not reflect their intrinsic value. With an annual average return of -0.35% 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 we've covered our "worst offender" list, let's take a look at some of Zacks' highest ranked mutual funds with some of the lowest fees you may want to consider.

Commerce Mid Cap Growth (CFAGX) is a fund that has an expense ratio of 0.81%, and a management fee of 0.5%. CFAGX 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 yearly returns of 12.75% over the last five years, this fund clearly wins.

ClearBridge Dividend Strategy Y (SOPYX) has an expense ratio of 0.73% and management fee of 0.65%. SOPYX is classified as an Allocation Balanced fund, which seeks to invest in a balance of asset types, like stocks, bonds, and cash, and including precious metals or commodities is not unusual. With annual returns of 10.36% over the last five years, this is a well-diversified fund with a long track record of success.

T. Rowe Price Blue Chip Growth Adviser (PABGX): Expense ratio: 0.96%. Management fee: 0.56%. PABGX 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. PABGX has produced a 13.84% over the last five years.

Bottom Line

So, there you have it - if your advisor has you invested in any of our "Mutual Fund Misfires of the Market," there is a good probability that they are either asleep at the wheel, incompetent, or (most likely) lining their pockets with high fee commissions at your financial expense.

If you have concerns or any doubts about your investment advisor, read our just-released report:

4 Warning Signs That Your Advisor Might be Sabotaging Your Financial Future


This report can help you avoid the costly mistake of picking or sticking with the wrong investment advisor. Click here for free report>>
 
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Zacks Investment Research