Large-cap funds are considered prudent choices for risk-averse investors when compared to their small and mid-cap counterparts. These funds have exposure to large-cap stocks, with a long-term performance history and offer more stability than mid or small caps. Companies with market capitalization of more than $10 billion are generally considered large cap. However, due to their significant international exposure, large-cap companies might be affected by a global downturn.
Investors looking for a bargain, i.e., stocks trading at a discount, are mostly interested in value funds, which pick stocks that tend to trade at a price lower than their fundamentals (i.e. earnings, book value, debt equity) and pay out dividends. In the long run, value stocks are expected to outperform the growth ones across all asset classes and are less vulnerable to trending markets. However, investors interested in value funds for yield should check the mutual fund yield as not all value funds comprise companies that primarily use their earnings to pay out dividends.
Below we share with you three top-ranked, large-cap value mutual funds. Each has earned a Zacks Mutual Fund Rank #1 (Strong Buy) and is expected to outperform its peers in the future. Investors can click here to see the complete list of large-cap value funds.
MFS Equity Income Fund Class A (EQNAX - Free Report) aims for total return via a combination of current income and capital appreciation. The fund invests the majority of its assets in equity securities and in dividend-paying common stocks. It may also invest in the assets in foreign securities and other types of income-producing securities, including convertible securities, preferred stocks, and equity interests in REITs. EQNAX has returned nearly 5% over the past three years.
Jonathan W. Sage is one of the fund managers of EQNAX since 2012.
Putnam Equity Income Fund Class A (PEYAX - Free Report) aims for capital growth and current income. The fund invests in common stocks of midsize and large U.S. companies, with a focus on value stocks that offer the potential for capital growth, current income, or both. PEYAX has returned 5.9% over the past three years.
PEYAX has an expense ratio of 0.91% compared with the category average of 1.00%.
Westwood LargeCap Value Fund A Class (WWLAX - Free Report) aims for long-term capital appreciation. The fund primarily invests its assets in common stocks and other equity securities of large-capitalization companies. WWLAX has returned 5.5% over the past three years.
As of June 2020, WWLAX held 49 issues, with 3.47% of its assets invested in JPMorgan Chase & Co.
To view the Zacks Rank and past performance of all large-cap value mutual funds, investors can click here to see the complete list of funds.
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