You may need to start looking for a new financial advisor if your current one has put any of these high-fee, low-return "Mutual Fund Misfires of the Market" into your portfolio.
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.
Transamerica Emerging Markets Equity A (AEMTX): Expense ratio: 1.59%. Management fee: 0.92%. After expenses, the 5 year return is 1.4%, meaning your fees are far higher than the fund's returns.
361 Managed Futures Strategy I (AMFZX): 1.89% expense ratio, 1.59%. 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 yearly returns of 1.69% over the most recent five years. Another fund liable of having investors pay more in charges than what they receive in return.
Ashmore Emerge Markets Local Current Bond C (ELBCX): This fund has an expense ratio of 1.97% and management fee of 0.95%. ELBCX is an International Bond - Emerging option; these funds focus on fixed income securities from a variety of emerging international markets. With an annual average return of 1.65% 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.
Oppenheimer Discovery I (ODIIX): Expense ratio: 0.67%. Management fee: 0.63%. ODIIX is a Small Cap Growth mutual fund building their portfolio around stocks with market caps under $2 billion and large growth opportunities. This fund has achieved five-year annual returns of an astounding 11.74%.
BlackRock Advantage Small Cap Core I (BDSIX) is a stand out fund. BDSIX is a Small Cap Blend mutual fund, and usually targets stocks with market caps of less than $2 billion, letting investors diversify their funds among other kinds of small-cap equities. With five-year annualized performance of 10.1% and expense ratio of 0.49%, this diversified fund is an attractive buy with a strong history of performance.
MFS International Value Fund R5 (MINJX) is an attractive fund with a five-year annualized return of 10.24% and an expense ratio of just 0.62%. MINJX is a Non US - Equity option, focusing their investments acoss emerging and developed markets, and can often extend across cap levels too.
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.
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