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Mutual Fund Misfires of the Market

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.

The easiest way to judge a mutual fund's quality over time is by analyzing its performance and fees. Our Zacks Rank of over 19,000 mutual funds has identified some of the worst of the worst mutual funds you should avoid, the funds with the highest fees and poorest long-term performance.

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.

Janus Henderson Short Term Bond C (JSHCX): 1.49% expense ratio and 0.44% management fee. JSHCX is an Investment Grade Bond - Short fund. By investing in bonds that mature in less than two years, Investment Grade Bond - Short funds are focused on the short end of the curve. With a five year after-expenses return of 0.73%, you're mostly paying more in fees than returns.

AB Allocation Market Real Return A (AMTAX): AMTAX 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. AMTAX offers an expense ratio of 1.26% and annual returns of -0.04% 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.

Cutler Fixed Income Fund (CALFX) - 1.57% expense ratio, 0.5% management fee. This fund has yielded yearly returns of 0.86% in the course of the last five years. Too bad!

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.

Touchstone Sands Capital Institutional Growth (CISGX): Expense ratio: 0.81%. Management fee: 0.78%. CISGX 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. This fund has achieved five-year annual returns of an astounding 11.74%.

PIMCO StocksPLUS Absolute Return P (PTOPX) is a stand out fund. PTOPX is a Large Cap Blend fund, targeting companies with market caps of over $10 billion. These funds offer investors a stability, and are perfect for people with a "buy and hold" mindset. With five-year annualized performance of 11.66% and expense ratio of 0.74%, this diversified fund is an attractive buy with a strong history of performance.

T. Rowe Price Global Stock Adviser (PAGSX): Expense ratio: 1.09%. Management fee: 0.64%. PAGSX is a Global - Equity mutual fund. These funds invest in large markets like the U.S., Europe, and Japan, and operate with very few geographical limitations. PAGSX has produced a 13.88% over the last five years.

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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Get Your Free (CISGX): Fund Analysis Report
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Get Your Free (JSHCX): Fund Analysis Report
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Get Your Free (PTOPX): Fund Analysis Report
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