Mutual Fund Misfires of the Market - November 12, 2019

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.

High fees coupled with poor results: It's a straightforward equation for an awful mutual fund. Some are more regrettable than others - and some are bad to the point that they have got a "Strong Sell" from our Zacks Rank, the lowest positioning of the almost 19,000 mutual funds we rank every day.

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.

Invesco Gold & Precious Metals C (IGDCX): 2.22% expense ratio and 0.75% management fee. Sector - Precious Metal funds like IGDCX normally invest in stocks focused on the mining and production of precious metals such as gold, silver, platinum, and palladium. With a five year after-costs return of -0.47%, you're for the most part paying more in charges than returns.

Hussman Strategic Growth Fund (HSGFX): HSGFX is a Long Short - Equity option. These funds' investment strategy consists of minimizing overall market exposure, while at the same time taking long positions in equities that are expected to appreciate and short positions in equities that are projected to decline. HSGFX offers an expense ratio of 1.14% and annual returns of -8.83% over the last five years. Even if this fund can be positioned as a hedge during the recent bull-market, paying more in fees than returns over the long-term should never be an acceptable result.

JPMorgan International Value L (JNUSX) - 0.66% expense ratio, 0.6% management fee. JNUSX 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. JNUSX has generated annual returns of -0.85% over the last five years. Ouch!

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.

T. Rowe Price Mid-Cap Growth R (RRMGX) is a winner, with an expense ratio of just 1.27% and a five-year annualized return track record of 12.58%.

City Natural Rochdale US Core Equity & Income Institutional (CNRUX) has an expense ratio of 0.54% and management fee of 0.4%. CNRUX 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 annual returns of 11.84% over the last five years, this is a well-diversified fund with a long track record of success.

Janus Henderson Growth & Income S (JADGX) has an expense ratio of 1.13% and management fee of 0.6%. JADGX is part of the Large Cap Blend section, and these mutual funds most often invest in firms with a market capitalization of $10 billion or more. By investing in bigger companies, these funds offer more stability, and are often well-suited for investors with a "buy and hold" mindset. With annual returns of 11.18% over the last five years, this fund is a well-diversified fund with a long track record of success.

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.

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