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Are You Invested In These 3 Mutual Fund Misfires? - March 26, 2020

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.

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.

MainStay Unconstrained Bond C (MSICX): 2.04% expense ratio and 0.57% management fee. MSICX is a Diversified Bonds investment option; these funds give investors exposure to a variety of fixed income types that span across different issuers, maturities, and credit levels. With a five year after-costs return of 1.84%, you're for the most part paying more in charges than returns.

Rydex Energy Services H (RYVAX): 1.72% expense ratio, 0.85%. RYVAX is classified as a Sector - Energy mutual fund. Throughout the massive global energy sector, these funds hold a wide range of quickly changing and vitally important industries. This fund has yearly returns of -18.24% over the most recent five years. Another fund liable of having investors pay more in charges than what they receive in return.

Hussman Strategic Growth Fund (HSGFX): Expense ratio: 1.15%. Management fee: 0.9%. HSGFX is a Market Neutral - Equity mutual fund. Their portfolios typically hold 50% of their securities in a long position, and 50% in a short position. With annual returns of just -8.98%, it's no surprise this fund has received Zacks' "Strong Sell" ranking.

3 Top Ranked Mutual Funds

Since you've seen the most noticeably lowest Zacks Ranked mutual funds, how about we take a look at some of the top ranked mutual funds with the least fees.

Meridian Growth Institutional (MRRGX): Expense ratio: 0.83%. Management fee: 0.76%. MRRGX is one of many Small Cap Growth mutual funds; these funds tend to create their portfolios around stocks with market capitalization of less than $2 billion. This fund has achieved five-year annual returns of an astounding 10.43%.

Royce International Premier Fund Series (RYIPX) is a stand out fund. RYIPX is a Non US - Equity option, focusing their investments acoss emerging and developed markets, and can often extend across cap levels too. With five-year annualized performance of 13.49% and expense ratio of 1.44%, this diversified fund is an attractive buy with a strong history of performance.

T. Rowe Price Blue Chip Growth Adviser (PABGX) has an expense ratio of 0.96% and management fee of 0.56%. PABGX 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 yearly returns of 14.92% over the last five years, this fund is well-diversified with a long reputation of salutary performance.

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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