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Mutual Fund Misfires of the Market - October 10, 2019

Zacks Equity Research

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.

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.

Invesco International Small Company R6 (IEGFX): 1.14% expense ratio and 0.93% management fee. IEGFX 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-expenses return of 0.98%, you're mostly paying more in fees than returns.

Guinness Atkinson Renminbi Yuan & Bond (GARBX): 0.93% expense ratio, 0.55% management fee. GARBX is an International Bond - Emerging option; these funds focus on fixed income securities from a variety of emerging international markets. This fund has an annual returns of 0.6% over the last five years. Another fund guilty of having investors pay more in fees than returns.

Wells Fargo Absolute Return A (WARAX) - 1.48% expense ratio, 0.72% management fee. WARAX 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. WARAX has generated annual returns of -0.2% 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.

Janus Henderson Global Technology I (JATIX): Expense ratio: 0.78%. Management fee: 0.64%. JATIX is a Sector - Tech mutual fund, allowing investors to own a stake in a notoriously volatile sector with a much more diversified approach. This fund has achieved five-year annual returns of an astounding 18.28%.

Fidelity Advisor Growth Opportunit (FAOFX): Expense ratio: 0.01%. Management fee: 0%. FAOFX 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. FAOFX has managed to produce a robust 17.71% over the last five years.

JPMorgan Small Cap Growth Fund R6 (JGSMX): Expense ratio: 0.74%. Management fee: 0.65%. JGSMX is a Small Cap Growth mutual fund and tends to feature small companies in up-and-coming industries and markets. JGSMX has produced a 13.66% over the last five years.

Bottom Line

We hope that your investment advisor (if you use one) has you invested in one or all of the top-ranked mutual funds we've reviewed. But if that is not the case, and your advisor has you invested in any of the funds on our "worst offender" list, it might be time to have a conversation or reconsider this vitally important relationship.

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


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