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4 Large-Cap Value Mutual Funds for a Stable Portfolio
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In recent months, growth stocks have not done well amid fears of a recession in the United States. July did see a turnaround in Wall Street. Still, with expectations of further monetary policy tightening by the Fed and treasury yields rising, investors remain apprehensive about the health of the economy. Large-cap value funds can be prudent instruments to invest in as they are expected to outperform the growth ones when markets start to bounce back, because of their current undervaluation.
In volatile markets, large-cap funds are usually considered far more sought-after choices by risk-averse investors than small and mid-cap funds. These funds comprise large-cap stocks with long-term performance history and are more stable than mid or small caps. Companies with market capitalization of more than $10 billion are generally considered large cap. The caveat, though, is that large-cap companies are also impacted by major global downturns because of their international exposure. To shield against such eventuality, which mirrors the global markets currently, investors are prone to look at stocks trading at a discount, or at value funds.
In a value investment strategy, investors pick stocks that are undervalued compared to their intrinsic value (i.e., earnings, book value, debt equity). In the long run, value stocks are expected to outperform the growth ones across all asset classes and are less vulnerable to market volatility. People who already have significant exposure to growth stocks also opt for value funds to ensure a stable return on investment in any market cycle. While opting for large-cap value funds, however, one must look into the performance of these funds over the years and economic cycles to assess how these funds have done when the chips have been up or down.
We have thus selected three such large-cap value mutual funds that boast a Zacks Mutual Fund Rank #1 (Strong Buy), 2 (Buy), have positive three-year and five-year annualized returns, minimum initial investments within $5000 and carry a low expense ratio.
American Century Investments Focused Large Cap Value Fund Investor Class (ALVIX - Free Report) seeks long-term growth of capital, and invests the majority of its net assets in securities of large-cap companies. The advisors define large-cap companies as those with capitalizations within the range of the Russell 1000 Index. ALVIX managers look for companies whose stock prices are undervalued.
Kevin N. Toney has been the lead manager of ALVIX since Dec 9, 2020, and three major holdings for the fund are 5.3% in Johnson & Johnson, 5.2% in Medtronic plc and 4.1% in Unilever plc.
ALVIX’s 3-year and 5-year annualized returns are 8.2% and 7.6%, respectively. Its net expense ratio is 0.83% compared to the category average of 0.94%. ALVIX has a Zacks Mutual Fund Rank #2. To see how this fund performed compared in its category, and other 1 and 2 Ranked Mutual Funds, please click here.
Bridge Builder Large Cap Value Fund (BBVLX - Free Report) invests the majority of its net assets in the securities of large-cap companies and other instruments, such as certain investment companies, which seek to track the performance of securities of large-cap companies. BBVLX may invest in American Depositary Receipts or Global Depositary Receipts.
Puneet J. Mansharamani has been the lead manager of BBVLX since May 3, 2020, and three major holdings for the fund are 1.9% in Merck & Co. Inc., 1.7% in Comcast Corp. and 1.5% in UnitedHealth Group Inc.
BBVLX’s 3-year and 5-year annualized returns are 9.7% and 9.3%, respectively. Its net expense ratio is 0.23% compared to the category average of 0.94%. BBVLX has a Zacks Mutual Fund Rank #1.
Northern Large Cap Value Fund (NOLVX - Free Report) seeks long-term growth of capital, and invests the majority of its net assets in securities of large-cap companies. The advisors define large-cap companies as those with capitalizations within the range of the Russell 1000A Index.
Sridhar Kancharla has been the lead manager of NOLVX since Jul 30, 2015, and three major holdings for the fund are 3.2% in Johnson & Johnson, 2.9% in JPMorgan Chase & Co. and 2.4% in Exxon Mobil Corp.
NOLVX’s 3-year and 5-year annualized returns are 7.7% and 7.4%, respectively. Its net expense ratio is 0.57% compared to the category average of 0.94%. NOLVX has a Zacks Mutual Fund Rank #1.
Transamerica Large Value Opportunities (TLOTX - Free Report) invests the majority of its net assets in securities of large-cap value companies and other investments with similar economic features. For investment purposes, large-cap value companies are selected from companies with market cap that exceed the market cap of the smallest company included on the MSCI USA Value Index.
Sheedsa T Ali has been the lead manager of TLOTX since Aug 31, 2018, and three major holdings for the fund are 3% in Berkshire Hathaway Inc., 2.8% in Procter & Gamble Co. and 2.4% in Johnson & Johnson.
TLOTX’s 3-year and 5-year annualized returns are 7.4% and 7.6%, respectively. Its net expense ratio is 0.49% compared to the category average of 0.94%. NOLVX has a Zacks Mutual Fund Rank #1.
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4 Large-Cap Value Mutual Funds for a Stable Portfolio
In recent months, growth stocks have not done well amid fears of a recession in the United States. July did see a turnaround in Wall Street. Still, with expectations of further monetary policy tightening by the Fed and treasury yields rising, investors remain apprehensive about the health of the economy. Large-cap value funds can be prudent instruments to invest in as they are expected to outperform the growth ones when markets start to bounce back, because of their current undervaluation.
In volatile markets, large-cap funds are usually considered far more sought-after choices by risk-averse investors than small and mid-cap funds. These funds comprise large-cap stocks with long-term performance history and are more stable than mid or small caps. Companies with market capitalization of more than $10 billion are generally considered large cap. The caveat, though, is that large-cap companies are also impacted by major global downturns because of their international exposure. To shield against such eventuality, which mirrors the global markets currently, investors are prone to look at stocks trading at a discount, or at value funds.
In a value investment strategy, investors pick stocks that are undervalued compared to their intrinsic value (i.e., earnings, book value, debt equity). In the long run, value stocks are expected to outperform the growth ones across all asset classes and are less vulnerable to market volatility. People who already have significant exposure to growth stocks also opt for value funds to ensure a stable return on investment in any market cycle. While opting for large-cap value funds, however, one must look into the performance of these funds over the years and economic cycles to assess how these funds have done when the chips have been up or down.
Mutual funds, in general, reduce transaction costs and diversify portfolios without an array of commission charges that are mostly associated with stock purchases (read more: Mutual Funds: Advantages, Disadvantages, and How They Make Investors Money).
We have thus selected three such large-cap value mutual funds that boast a Zacks Mutual Fund Rank #1 (Strong Buy), 2 (Buy), have positive three-year and five-year annualized returns, minimum initial investments within $5000 and carry a low expense ratio.
American Century Investments Focused Large Cap Value Fund Investor Class (ALVIX - Free Report) seeks long-term growth of capital, and invests the majority of its net assets in securities of large-cap companies. The advisors define large-cap companies as those with capitalizations within the range of the Russell 1000 Index. ALVIX managers look for companies whose stock prices are undervalued.
Kevin N. Toney has been the lead manager of ALVIX since Dec 9, 2020, and three major holdings for the fund are 5.3% in Johnson & Johnson, 5.2% in Medtronic plc and 4.1% in Unilever plc.
ALVIX’s 3-year and 5-year annualized returns are 8.2% and 7.6%, respectively. Its net expense ratio is 0.83% compared to the category average of 0.94%. ALVIX has a Zacks Mutual Fund Rank #2. To see how this fund performed compared in its category, and other 1 and 2 Ranked Mutual Funds, please click here.
Bridge Builder Large Cap Value Fund (BBVLX - Free Report) invests the majority of its net assets in the securities of large-cap companies and other instruments, such as certain investment companies, which seek to track the performance of securities of large-cap companies. BBVLX may invest in American Depositary Receipts or Global Depositary Receipts.
Puneet J. Mansharamani has been the lead manager of BBVLX since May 3, 2020, and three major holdings for the fund are 1.9% in Merck & Co. Inc., 1.7% in Comcast Corp. and 1.5% in UnitedHealth Group Inc.
BBVLX’s 3-year and 5-year annualized returns are 9.7% and 9.3%, respectively. Its net expense ratio is 0.23% compared to the category average of 0.94%. BBVLX has a Zacks Mutual Fund Rank #1.
Northern Large Cap Value Fund (NOLVX - Free Report) seeks long-term growth of capital, and invests the majority of its net assets in securities of large-cap companies. The advisors define large-cap companies as those with capitalizations within the range of the Russell 1000A Index.
Sridhar Kancharla has been the lead manager of NOLVX since Jul 30, 2015, and three major holdings for the fund are 3.2% in Johnson & Johnson, 2.9% in JPMorgan Chase & Co. and 2.4% in Exxon Mobil Corp.
NOLVX’s 3-year and 5-year annualized returns are 7.7% and 7.4%, respectively. Its net expense ratio is 0.57% compared to the category average of 0.94%. NOLVX has a Zacks Mutual Fund Rank #1.
Transamerica Large Value Opportunities (TLOTX - Free Report) invests the majority of its net assets in securities of large-cap value companies and other investments with similar economic features. For investment purposes, large-cap value companies are selected from companies with market cap that exceed the market cap of the smallest company included on the MSCI USA Value Index.
Sheedsa T Ali has been the lead manager of TLOTX since Aug 31, 2018, and three major holdings for the fund are 3% in Berkshire Hathaway Inc., 2.8% in Procter & Gamble Co. and 2.4% in Johnson & Johnson.
TLOTX’s 3-year and 5-year annualized returns are 7.4% and 7.6%, respectively. Its net expense ratio is 0.49% compared to the category average of 0.94%. NOLVX has a Zacks Mutual Fund Rank #1.
Want key mutual fund info delivered straight to your inbox?
Zacks' free Fund Newsletter will brief you on top news and analysis, as well as top-performing mutual funds, each week. Get it free >>