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Buyer Beware - Worst Performing Mutual Funds & ETFs From 2012-2017

The 10 worst performing mutual funds and ETFs for the past five years features a notably underperforming natural resources sector (such as energy, mineral, oil, gas, and coal companies), whose annual average loss of 7.3% leads all sectors for poor performance.

According to BankInvestmentConsultant, these are the 20 worst-performing funds over the past five years. The following tables pale in comparison to the S&P 500 as measured by the Vanguard 500 Index Fund (FOO), whose five-year return was +14.4% with an expense ratio of four basis points. The following funds are ranked by 5-year return:

Rank

Name

Symbol

1-Year Return

5-Year Return

Expense Ratio

Total Assets (Millions)

20

VanEck Global Hard Assets

GHAAX

-3.87%

-3.97%

1.38%

$2,016

19

Fidelity Slct Energy Service Port

FSESX

3.83%

-4.21%

0.84%

$518

18

Franklin Natural Resources

FRNRX

0.19%

-4.23%

1.05%

$528

17

Prudential Jennison Natural Resources

PRGNX

0.74%

-4.55%

1.95%

$1,537

16

Fidelity Latin America

FLATX

15.95%

-5.32%

1.13%

$611

15

Invesco Energy Inv

FSTEX

-6.85%

-5.32%

1.27%

$652

14

Victory Global Natural Resources

RSNRX

5.58%

-5.41%

1.48%

$1,489

13

J-Hancock Natural Resources

JHNRX

1.77%

-5.44%

0.95%

$518

12

Vanguard Precious Metals and Mining

VGPMX

-13.98%

-5.63%

0.43%

$2,592

11

VanEck Vectors Oil Services ETF

OIH

-10.63%

-7.10%

0.35%

$1,045

The 20-11th worst-performers include several key investment names, such as Fidelity, Prudential, and Vanguard, and some of these funds have even turned a positive return (sometimes significantly so) in the past year; nonetheless, their five-year returns have been consistently negative. Accordingly, such investments may not be suitable for more conservative or long-term horizon-oriented investors. The trend continues into the Top (or Bottom) 10:

Rank

Name

Symbol

1-Year Return

5-Year Return

Expense Ratio

Total Assets (Millions)

10

SPDR S&P Oil & Gas Exploration & Production ETF

XOP

-4.22%

-7.63%

0.35%

$2,010

9

VanEck Int'l Investors Gold

INIVX

-22.93%

-7.83%

1.26%

$650

8

First Eagle Gold

SGGDX

-19.60%

-7.85%

1.27%

$1,201

7

Franklin Gold and Precious Metals

FKRCX

-26.85%

-8.83%

1.11%

$1,099

6

Tocqueville Gold

TGLDX

-20.57%

-8.83%

1.39%

$1,178

5

Oppenheimer Gold & Special Minerals

OPGSX

-20.00%

-8.92%

1.17%

$1,044

4

Fidelity Select Gold

FSAGX

-23.40%

-9.25%

0.84%

$1,460

3

VanEck Vectors Gold Miners ETF

GDX

-24.96%

-11.15%

0.51%

$7,270

2

USAA Precious Metals and Minerals

USAGX

-26.02%

-11.21%

1.22%

$585

1

VanEck Vectors Junior Gold Miners ETF

GDXJ

-29.21%

-13.51%

0.52%

$3,817

As suggested by overall worst-performer VanEck Vectors Junior Gold Miners ETF (GDXJ), and similarly by mutual funds such as #7 Franklin Gold and Precious Metals (FKRCX) and others, GDXJ's significantly poor one-year return of nearly -29% and similar year-over-year volatility amongst mutual funds can disguise a fund's overall trend over a longer period of time.

For instance, GDXJ might have performed at -29.21% over the past year, but "only" suffered a -13.51% return over its past five. Thus, by law of averages, GDXJ (or #9 INIVX, #8 SGGDX, etc.) must have performed better - and even positively - over some portion of the past five years so as to bring the average "up" to -13.51% from the one-year pit of about -29%.

This law-of-averages approach explains why some funds might deceptively appear to be doing well (#16 Fidelity Latin America had a one-year return of 15.95%), when in fact, a deeper look reveals a history of underperformance (#16 Fidelity FLATX's five-year return was -5.32%). This once again suggests an unsuitable product for more risk-averse and longer-term investors seeking consistent growth and less volatility.

If you have invested with any broker or financial adviser whose recommendation of one of the aforementioned 20 worst performing ETFs and mutual funds was unsuitable given your investments objectives and risk tolerance preferences, or has over concentrated such a position in your portfolio, and this misconduct has proven harmful to your investments or interests, please call The Law Offices of Jonathan W. Evans & Associates at (800) 699-1881 for an investigation and consultation.

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