3 Mutual Fund Misfires To Avoid In Your Retirement Portfolio - January 24, 2020
If your advisor has you invested in any of these "Mutual Fund Misfires of the Market" with high fees and low returns, you need to rethink 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.
American Funds ST Bond Fund of America 529C (CCAMX): 1.46% expense ratio and 0.27% management fee. CCAMX 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. With a five year after-costs return of -0.1%, you're for the most part paying more in charges than returns.
AB Unconstrained Bond K (AGSKX): AGSKX 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. AGSKX offers an expense ratio of 0.9% and annual returns of 0.5% over the last five years. Even if this fund can be positioned as a hedge during the recent bull-market, paying more in fees than returns over the long-term should never be an acceptable result.
Fidelity Advisor Strategy Real Return C (FCSRX): This fund has an expense ratio of 1.85% and management fee of 0.55%. FCSRX is classified in Investment Grade Bond - Intermediate fund category; these funds target the middle section of the curve, typically by investing in bonds that mature in more than three years but less than 15 years. With an annual average return of 1.16% 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
There you have it: some prime examples of truly bad mutual funds. In contrast, here are a few funds that have achieved high Zacks Ranks and have low fees.
MFS Mass Investors Growth Stock B (MIGBX) is a winner, with an expense ratio of just 1.47% and a five-year annualized return track record of 12.69%.
Fidelity Trend Fund (FTRNX) has an expense ratio of 0.65% and management fee of 0.49%. FTRNX is a Global - Equity mutual fund, which invests their assets in large markets, leveraging the global economy. With annual returns of 13.45% over the last five years, this is a well-diversified fund with a long track record of success.
Franklin Small Cap Growth R6 (FSMLX) has an expense ratio of 0.64% and management fee of 0.62%. FSMLX is a Small Cap Growth mutual fund and tends to feature small companies in up-and-coming industries and markets. With yearly returns of 10.58% over the last five years, this fund is well-diversified with a long reputation of salutary performance.
Bottom Line
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.
Do You Know the Top 9 Retirement Investing Mistakes?
Whether you're planning to retire early or not, don't let investing mistakes derail your plans.
If you have $500,000 or more to invest and want to learn more, click the link to download our free report, 9 Retirement Mistakes that will Ruin Your Retirement.
This report will help you steer clear of the most common mistakes, like trying to time the market, lack of diversification in your portfolio, and many more. Get Your FREE Guide Now
Get Your Free (FSMLX): Fund Analysis Report
Get Your Free (FCSRX): Fund Analysis Report
Get Your Free (AGSKX): Fund Analysis Report
Get Your Free (CCAMX): Fund Analysis Report
Get Your Free (FTRNX): Fund Analysis Report
Get Your Free (MIGBX): Fund Analysis Report
To read this article on Zacks.com click here.
Zacks Investment Research
