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Are You Invested In These 3 Mutual Fund Misfires? - February 05, 2020

Zacks Equity Research
·4-min read

If your advisor has you invested in any of these "Mutual Fund Misfires of the Market" with high fees and low returns, you need to rethink 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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Catalyst Small Cap Insider Buy C (CTVCX): 2.52% expense ratio and 1.25% management fee. CTVCX is a Small Cap Growth mutual fund and tends to feature small companies in up-and-coming industries and markets. With a five year after-costs return of -3.32%, you're for the most part paying more in charges than returns.

Sierra Core Retirement A (SIRAX): 1.73% expense ratio, 1.25%. SIRAX is an Allocation Balanced mutual fund. Allocation Balanced funds look to invest across asset types, like stocks, bonds, and cash, and including precious metals or commodities is not unusual; these funds are mostly categorized by their respective asset allocation. This fund has yearly returns of 1.2% over the most recent five years. Another fund liable of having investors pay more in charges than what they receive in return.

Ivy Natural Resources E (IGNEX): This fund has an expense ratio of 1.27% and management fee of 0.85%. IGNEX is a Sector - Energy mutual fund, which encompasses a wide range of vastly changing and vitally important industries throughout this massive global sector. With an annual average return of -3.88% 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.

TIAA-CREF Enhanced Large Cap Growth Index Institutional (TLIIX) is a winner, with an expense ratio of just 0.33% and a five-year annualized return track record of 13.91%.

Emerald Growth Fund Institutional (FGROX): Expense ratio: 0.69%. Management fee: 0.56%. FGROX is a Small Cap Growth mutual fund and tends to feature small companies in up-and-coming industries and markets. FGROX has managed to produce a robust 10.36% over the last five years.

Janus Henderson Global Technology T (JAGTX) has an expense ratio of 0.92% and management fee of 0.64%. JAGTX 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. With annual returns of 20.22% over the last five years, this fund is a well-diversified fund with a long track record of success.

Bottom Line

These examples underscore the huge range in quality of mutual funds - from the really bad to the astonishingly good. There is no reason for your advisor to keep your money in any fund that charges more than you get in return (unless they're getting something out of it, like a high commission).

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Get Your Free (FGROX): Fund Analysis Report
 
Get Your Free (IGNEX): Fund Analysis Report
 
Get Your Free (SIRAX): Fund Analysis Report
 
Get Your Free (CTVCX): Fund Analysis Report
 
Get Your Free (JAGTX): Fund Analysis Report
 
Get Your Free (TLIIX): Fund Analysis Report
 
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Zacks Investment Research