Similar to the worst player on an all-star team, the worst-performing mutual funds sometimes still score runs when the overall markets are strong enough. Case in point: The worst-performing international funds in 2017 with at least $100 million in assets were all in the black.
After this month’s slideshow on the 20 best performing international funds in 2017 found some posted gains as high as 59%, we turned to the worst 20. Even among these 20 underachievers, the average return is 14%. (While it hurts to miss your benchmark, you don’t go broke reaping double-digit returns.)
For some context, the long-term average annualized return of U.S. stocks is just 7%, adjusted for inflation (closer to 10% in unadjusted numbers).
When advisors and investors only need a dartboard to get returns like this, it’s easy to think they’re geniuses. But a look at the three-year marks (average among these 20 is 7.8%) will remind them that everything reverts to the mean over time. Still impressive, although hardly apace with the U.S. equity market advance of 13% for the same period. In addition, expense ratios of U.S.-focused funds tend to be considerably cheaper.
Looking forward, some skeptics wonder if emerging markets, a subset of international funds, will be able to maintain their current strides amid a stronger dollar and potential global economic slowdown.
Scroll through to see the 20 worst-performing mutual funds with at least $100 million in assets. As usual, three-year performance and expense ratios are also listed. All data from Morningstar Direct.
20. SEI Global Managed Volatility A (SIIT) (SGMAX)