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.
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.
Touchstone Ultra Short Duration Fixed Income C (TSDCX): This fund has an expense ratio of 1.19% and a management fee of 0.25%. Without even doing any in-depth analysis, just the fact that you are paying more in fees than you’re earning in returns is reason enough not to invest. TSDCX is a Government Bond – Short fund, and these funds hold securities issued by the U.S. federal government. This category focuses on the short end of the curve, and are seen as extremely low risk securities from a default perspective. The fund has lagged performance-wise, so perhaps a simpler index future investing strategy might be more effective.
Neuberger Berman Absolute Return Multi Manager C (NABCX): 3.09% expense ratio, 1.96%. NABCX 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 -0.36% over the most recent five years. Another fund liable of having investors pay more in charges than what they receive in return.
MainStay International Opportunities A (MYITX): Expense ratio: 1.67%. Management fee: 1.1%. MYITX is a Non US – Equity fund. Many of these funds like to allocate across emerging and developed markets, and will often focus on all cap levels. With annual returns of just 0.94%, 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.
Brown Advisory Flexible Equity Adviser (BAFAX) is a winner, with an expense ratio of just 0.97% and a five-year annualized return track record of 11.21%.
MassMutual Select Small Cap Growth Equity Admiral (MSGLX) has an expense ratio of 1.16% and management fee of 0.8%. MSGLX is a Small Cap Growth mutual fund and tends to feature small companies in up-and-coming industries and markets. With annual returns of 10.65% over the last five years, this is a well-diversified fund with a long track record of success.
MFS Mass Investors Growth Stock R3 (MIGHX): Expense ratio: 0.73%. Management fee: 0.33%. MIGHX 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. MIGHX has produced a 13.98% over the last five years.
Along these lines, there you have it – if your financial guide has you put your money into any of our “Mutual Fund Misfires of the Market,” there is a strong likelihood that they are either dormant at the worst possible time, inept, or (in all probability) filling their pockets with high fee commissions at the cost of your financial objectives.
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.