Mutual Fund Misfires of the Market - December 31, 2019

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.

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.

Snow Capital Small Cap Value A (SNWAX): 1.5% expense ratio and 0.95% management fee. SNWAX is a Small Cap Value mutual fund option, which typically invest in companies with market caps under $2 billion. With a five year after-costs return of -2.1%, you're for the most part paying more in charges than returns.

Hartford Global Real Asset R3 (HRLRX): 1.5% expense ratio, 0.85% management fee. HRLRX is a Global - Equity mutual fund investing in bigger markets like the U.S., Europe, and Japan; these kinds of funds aren't limited by geography. This fund has an annual returns of -2.08% over the last five years. Another fund guilty of having investors pay more in fees than returns.

Oppenheimer SteelPath MLP Alpha Y (MLPOX) - 1.29% expense ratio, 1.1% management fee. MLPOX 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. MLPOX has generated annual returns of -7.14% over the last five years. Ouch!

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.

MassMutual Select Small Cap Growth Equity R5 (MSGSX) is a fund that has an expense ratio of 0.96%, and a management fee of 0.8%. MSGSX is a Small Cap Growth mutual fund and tends to feature small companies in up-and-coming industries and markets. With yearly returns of 10.54% over the last five years, this fund clearly wins.

T. Rowe Price Institutional Large Cap Growth (TRLGX) has an expense ratio of 0.56% and management fee of 0.55%. TRLGX is a part of the Large Cap Growth mutual fund category, which invest in many large U.S. companies that are expected to grow much faster compared to other large-cap stocks. With annual returns of 14.74% over the last five years, this is a well-diversified fund with a long track record of success.

Victory Sycamore Small Company Opportunity R (GOGFX) has an expense ratio of 1.46% and management fee of 0.76%. GOGFX is a Small Cap Value mutual fund option, which typically invest in companies with market caps under $2 billion. With annual returns of 10.9% over the last five years, this fund is a well-diversified fund with a long track record of success.

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.

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