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Top 3 Large-Cap Funds to Buy Amid Continued Market Turbulence
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June has been one of the rare months in recent times that has given investors a reason to cheer. Both consumer price and producer price indexes come up with readings that hint at slowing inflation. This prompted the Fed to finally halt its interest rate hikes in its June FOMC meeting after 10 straight increases of 500 basis points since March 2022.
Also, other key economic data that help in gauging the economy’s health have come in impressive or are showing signs of a rebound. The retail sector has been making a recovery with sales rising 0.3% in May after increasing 0.4% in April.
The homebuilding sector is also trying to get back on its feet with homebuilder confidence increasing in June for the sixth straight month to hit its highest level since July 2022. This saw both existing and new home sales increasing as well as a sharp jump in building permits and housing starts.
Moreover, new orders for U.S.-made factory goods have also started showing signs of improvement. All these factors have led to a solid jump in the confidence of Americans, with consumer confidence increasing to 109.7 in June to hit the highest level since January 2022.
However, markets still have reeled under volatile as inflation remains elevated, which has been concerning the Fed. A resilient labor market has left consumers with strong purchasing power despite the Fed’s steep interest rate hikes. This has compelled the central bank to announce that at least two more rate hikes of 25 basis points would be required by the end of this year.
Moreover, it is unlikely that the first interest rate cut will be before 2025, although market participants believe it might come in 2024. Markets were thus seen scrambling for direction.
In such a situation, investors should go for large-cap value funds to minimize risk. Large-cap equities have a longer track record of success and are more reliable than mid- or small-cap stocks.
Also, value funds, which include stocks that typically trade for less than their fundamentals (such as earnings, book value, and debt-to-equity ratios), as well as paying dividends, are popular among investors looking for a good deal.
We have selected three such large-cap value mutual funds that have given impressive 3-year and 5-year annualized returns, boast a Zacks Mutual Fund Rank #1 (Strong Buy), offer a minimum initial investment within $5,000 and carry a low expense ratio.
The question here is why should investors consider mutual funds? Reduced transaction costs and diversification of portfolios without the several commission charges that are associated with stock purchases are the primary reasons why one should be parking their money in mutual funds (read more: Mutual Funds: Advantages, Disadvantages, and How They Make Investors Money).
Three Best Choices
Commerce Value Fund (CFVLX - Free Report) invests the majority of its investable assets in common stocks of companies. CFVLX typically invests in stocks within the Russell 1000 Value Index that promise stable dividends.
Commerce Value Fund has 3-year and 5-year annualized returns of 9.7% and 6.8%, respectively. Annual expense ratio of 0.69% is lower than the category average of 0.94%. CFVLX 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) aims for capital appreciation. BBVLX invests the majority of its assets in securities of large-capitalization companies and other instruments, such as certain investment companies, with economic characteristics that seek to track the performance of securities of large-capitalization companies.
Bridge Builder Large Cap Value Fund has 3-year and 5-year annualized returns of 14% and 8.8%, respectively. Annual expense ratio of 0.23% is lower than the category average of 0.94%. BBVLX 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.
American Funds American Mutual Fund Class F-1 (AMFFX - Free Report) invests the majority of its investable assets in common stocks of companies that are expected to contribute to the growth of the American economy and have stable dividends.
AMFFX’s 3-year and 5-year annualized returns are 10.2% and 8%, respectively. Annual expense ratio of 0.64% is lower than the category average of 0.94%. American Funds American Mutual Fund Class F-1 has a Zacks Mutual Fund Rank #1. To see how this fund performed compared in its category, and other 1 and 2 Ranked Mutual Funds, please click here.
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Top 3 Large-Cap Funds to Buy Amid Continued Market Turbulence
June has been one of the rare months in recent times that has given investors a reason to cheer. Both consumer price and producer price indexes come up with readings that hint at slowing inflation. This prompted the Fed to finally halt its interest rate hikes in its June FOMC meeting after 10 straight increases of 500 basis points since March 2022.
Also, other key economic data that help in gauging the economy’s health have come in impressive or are showing signs of a rebound. The retail sector has been making a recovery with sales rising 0.3% in May after increasing 0.4% in April.
The homebuilding sector is also trying to get back on its feet with homebuilder confidence increasing in June for the sixth straight month to hit its highest level since July 2022. This saw both existing and new home sales increasing as well as a sharp jump in building permits and housing starts.
Moreover, new orders for U.S.-made factory goods have also started showing signs of improvement. All these factors have led to a solid jump in the confidence of Americans, with consumer confidence increasing to 109.7 in June to hit the highest level since January 2022.
However, markets still have reeled under volatile as inflation remains elevated, which has been concerning the Fed. A resilient labor market has left consumers with strong purchasing power despite the Fed’s steep interest rate hikes. This has compelled the central bank to announce that at least two more rate hikes of 25 basis points would be required by the end of this year.
Moreover, it is unlikely that the first interest rate cut will be before 2025, although market participants believe it might come in 2024. Markets were thus seen scrambling for direction.
In such a situation, investors should go for large-cap value funds to minimize risk. Large-cap equities have a longer track record of success and are more reliable than mid- or small-cap stocks.
Also, value funds, which include stocks that typically trade for less than their fundamentals (such as earnings, book value, and debt-to-equity ratios), as well as paying dividends, are popular among investors looking for a good deal.
We have selected three such large-cap value mutual funds that have given impressive 3-year and 5-year annualized returns, boast a Zacks Mutual Fund Rank #1 (Strong Buy), offer a minimum initial investment within $5,000 and carry a low expense ratio.
The question here is why should investors consider mutual funds? Reduced transaction costs and diversification of portfolios without the several commission charges that are associated with stock purchases are the primary reasons why one should be parking their money in mutual funds (read more: Mutual Funds: Advantages, Disadvantages, and How They Make Investors Money).
Three Best Choices
Commerce Value Fund (CFVLX - Free Report) invests the majority of its investable assets in common stocks of companies. CFVLX typically invests in stocks within the Russell 1000 Value Index that promise stable dividends.
Commerce Value Fund has 3-year and 5-year annualized returns of 9.7% and 6.8%, respectively. Annual expense ratio of 0.69% is lower than the category average of 0.94%. CFVLX 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) aims for capital appreciation. BBVLX invests the majority of its assets in securities of large-capitalization companies and other instruments, such as certain investment companies, with economic characteristics that seek to track the performance of securities of large-capitalization companies.
Bridge Builder Large Cap Value Fund has 3-year and 5-year annualized returns of 14% and 8.8%, respectively. Annual expense ratio of 0.23% is lower than the category average of 0.94%. BBVLX 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.
American Funds American Mutual Fund Class F-1 (AMFFX - Free Report) invests the majority of its investable assets in common stocks of companies that are expected to contribute to the growth of the American economy and have stable dividends.
AMFFX’s 3-year and 5-year annualized returns are 10.2% and 8%, respectively. Annual expense ratio of 0.64% is lower than the category average of 0.94%. American Funds American Mutual Fund Class F-1 has a Zacks Mutual Fund Rank #1. To see how this fund performed compared in its category, and other 1 and 2 Ranked Mutual Funds, please click here.
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 >>