Are You Invested In These 3 Mutual Fund Misfires? - November 19, 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.
High fees coupled with poor results: It's a straightforward equation for an awful mutual fund. Some are more regrettable than others - and some are bad to the point that they have got a "Strong Sell" from our Zacks Rank, the lowest positioning of the almost 19,000 mutual funds we rank every 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.
Templeton Growth A (TEPLX): 1.03% expense ratio and 0.68% management fee. TEPLX is a Global - Equity mutual fund, which invests their assets in large markets, leveraging the global economy. With a five year after-costs return of 0.14%, you're for the most part paying more in charges than returns.
Brandes International Small Cap Equity C (BINCX). Expense ratio: 2.11%. Management fee: 0.68%. Over the last 5 years, this fund has generated annual returns of -1.56%.
Third Avenue Value Fund Institutional (TAVFX): This fund has an expense ratio of 1.15% and management fee of 0.9%. TAVFX is a Small Cap Value mutual fund option, which typically invest in companies with market caps under $2 billion. With an annual average return of -3.54% 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
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.
Wilshire Small Company Growth Investor (DTSGX) is a fund that has an expense ratio of 1.33%, and a management fee of 0.85%. DTSGX 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. With yearly returns of 10.49% over the last five years, this fund clearly wins.
T. Rowe Price Science & Technology Fund (PRSCX) has an expense ratio of 0.79% and management fee of 0.64%. PRSCX is part of the Sector - Tech mutual fund category that invests in technology and lets investors own a stake in a notoriously volatile sector, but with a much more diversified approach. Thanks to yearly returns of 15.82% over the last five years, PRSCX is an effectively diversified fund with a long reputation of solidly positive performance.
DFA Real Estate Securities Institutional (DFREX) has an expense ratio of 0.18% and management fee of 0.17%. DFREX is categorized as a Sector - Real Estate mutual fund, which typically invests in various real estate investment trusts (REIT) due to their taxation rules. With yearly returns of 11.04% over the last five years, this fund is well-diversified with a long reputation of salutary performance.
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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