Does Your Retirement Portfolio Hold These 3 Mutual Fund Misfires? - February 19, 2020

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.

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.

Below, you'll read about some of the funds included in our current list of "Mutual Fund Misfires of the Market." And if by chance you're invested in any of these misfires, we'll help and review some of our highest Zacks Ranked mutual funds.

3 Mutual Fund Misfires

Now, let's take a look at three market misfires.

Pacific Advisors Income & Equity A (PADIX): This fund has an expense ratio of 4.06% and a management fee of 0.75%. 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. PADIX is classified as an Allocation Balanced fund, which seeks to invest in a balance of asset types, like stocks, bonds, and cash, and including precious metals or commodities is not unusual. The fund has lagged performance-wise, so perhaps a simpler index future investing strategy might be more effective.

MainStay Cushing Royalty Energy Income I (CURZX): 1.2% expense ratio, 0.95%. CURZX is a Sector - Energy mutual fund, which encompasses a wide range of vastly changing and vitally important industries throughout this massive global sector. This fund has yearly returns of -14.24% over the most recent five years. Another fund liable of having investors pay more in charges than what they receive in return.

PACE International Fixed Income A (PWFAX) - 1.03% expense ratio, 0.65% management fee. This fund has yielded yearly returns of 0.59% in the course of the last five years. Too bad!

3 Top Ranked Mutual Funds

Now that you've seen the worst Zacks Ranked mutual funds, let's have a look at some of the highest ranked funds with the lowest fees.

Brown Advisory Flexible Equity Institutional (BAFFX): 0.57% expense ratio and 0.44% management fee. BAFFX is classified as an Allocation Balanced fund, which seeks to invest in a balance of asset types, like stocks, bonds, and cash, and including precious metals or commodities is not unusual. With an annual return of 11.66% over the last five years, this fund is a winner.

WCM Focused International Growth Fund Institutional (WCMIX): Expense ratio: 1.02%. Management fee: 0.85%. WCMIX 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. WCMIX has managed to produce a robust 11.78% over the last five years.

MFS Global New Discovery R6 (GLNNX) has an expense ratio of 1.16% and management fee of 0.98%. GLNNX 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. With yearly returns of 11.3% 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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