Mutual Fund Misfires of the Market - December 03, 2019

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.

How can you tell a good mutual fund from a bad one? It's pretty basic: If the fund has high fees and performs poorly, it's not good. Of course, there's a range - but when a mutual fund earns a Zacks Rank of #5 (Strong Sell) that means it's among the worst of roughly 19,000 funds we rate each 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.

ClearBridge International Small Cap A (LCOAX): 1.42% expense ratio and 0.8% management fee. LCOAX is a Non US - Equity option, focusing their investments acoss emerging and developed markets, and can often extend across cap levels too. With a five year after-costs return of -0.76%, you're for the most part paying more in charges than returns.

361 Managed Futures Strategy I (AMFZX): 1.89% expense ratio, 1.59% management fee. AMFZX 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 an annual returns of 1.54% over the last five years. Another fund guilty of having investors pay more in fees than returns.

Templeton Global Balanced Fund C (FCGBX) - 1.95% expense ratio, 0.73% management fee. This fund has yielded yearly returns of 0.32% in the course of the last five years. Too bad!

3 Top Ranked Mutual Funds

There you have it: some prime examples of truly bad mutual funds. In contrast, here are a few funds that have achieved high Zacks Ranks and have low fees.

Hennessy Focus Fund Institutional (HFCIX) is a winner, with an expense ratio of just 1.11% and a five-year annualized return track record of 11.06%.

TIAA-CREF Enhanced Large Cap Growth Index Institutional (TLIIX) is a stand out fund. TLIIX 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 five-year annualized performance of 12.9% and expense ratio of 0.33%, this diversified fund is an attractive buy with a strong history of performance.

Columbia Global Equity Fund R5 (RGERX) has an expense ratio of 1% and management fee of 0.87%. RGERX is a Global - Equity mutual fund, which invests their assets in large markets, leveraging the global economy. With annual returns of 10.64% 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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