Shaking the Lemon Tree

My latest quarterly Lemon List, a list of the worst performing mutual funds, now is available online.

And believe me; you don’t have to look very hard to find some very big, widely held mutual funds that have found their way onto the Lemon List in what was a very bad quarter for equities.

One of those widely held funds is the Fidelity Growth and Income Fund (FGRIX). This large-cap core equity fund has assets of more than $15 billion, and an expense ratio of 0.68%. In Q2, the fund lost a whopping 10.1%. During the past 52 weeks FGRIX lost 24.08%.

Assess this lemon fund with a comparable ETF such as the SPDR S&P 500 (SPY). The SPY ETF has $78 billion in assets, and an expense ratio of just 0.08%. In Q2, the fund lost 7.03%. Not great, but much better than FGRIX. During the past 52 weeks, SPY fell 15.6%.

As you can see, you would have been much better off investing in SPY than investing in FGRIX, and it would have cost you a lot less money. Of course, in hindsight you would have been much better off with a 100% cash position during that same time period.

To get the complete Lemon List, absolutely FREE, simply go here.

If you find your mutual funds are underperforming their category average, you might need to do a little shaking of your own lemon tree. Of course, the first step is knowing what lemon funds you own, and that’s where my Lemon List can help.