Mutual Fund Wall of Shame

I’m starting an unofficial mutual fund wall of shame. This is a place of dubious distinction for funds that overcharge their investors for sub-par investment advice.

First on my list is the Rydex Inverse Government Long Bond Strategy Fund (RYJUX). It has at least three strikes against it.

  1. The expense ratio is particularly egregious at 3.72%.
  2. The turnover is 908% per year. It costs a lot of money to trade that much.
  3. Then there is the fact that most investors should never short anything, let alone a long-term government bond.

It should be no surprise that this fund has lost almost 6% per year over the past 10 years (as of 1/18/2019).

The second inductee into my wall of shame is the Eaton Vance Tax-Managed Equity Asset Allocation C Shares (ECEAX). It has a 1% load, which means you pay 1% of your investment for the privilege of buying it. Then you get to pay the ongoing 2.08% expense ratio after that. In return, you get a portfolio that is pretty much 1,500 U.S. stocks. That’s right. You may as well buy an index fund for 0.02% to get access to the entire U.S. stock market. It would improve your experience. ECEAX trails the S&P 500 Index by almost 4% per year (as of 1/18/2019).

Sadly, I didn’t just google lousy mutual funds to find these two. They were found in free portfolio reviews we offered to people in the past month. Let me know if you want us to check your portfolio to see if you’re overpaying for poor advice.

Legal Disclaimer: These posts do not constitute an offer or recommendation to buy or sell any securities or instruments or to participate in any particular investment or trading strategy. They are for informational purposes only. CTW gathers its data from sources it considers reliable. However, CTW makes no express or implied warranties regarding the accuracy of this information or any opinions expressed by the author and may update or change them without prior notification.

By  | October 29th, 2019 | Wealth Management

About the Author:

John has more than ten years experience as an Investment Advisor. He focuses on devising and maintaining portfolios that meet individuals’ needs, investment research, and investment strategy. John has been recognized as a “FIVE STAR wealth manager” by Twin Cities Business Magazine 2016-2020.