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3 Solid Large-Cap Funds to Buy Amid Ongoing Market Volatility
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Markets have been volatile over the past few weeks as investors are still trying to gauge the Fed’s next move with its current interest rate hike campaign. While many are hopeful that the central bank could soon end its interest rate hikes, Fed officials maintained their hawkish stance as they believe inflation is still elevated.
This has seen all three major indexes suffering over the past few weeks. The Dow and the S&P 500 ended last week down 2.2% and 2.1%, respectively. The Nasdaq ended 2.6% lower last week.
Interest Rate Hike Fears Grow
Fed officials remained hawkish in the July meeting, saying, “further tightening of monetary policy” is needed to ease inflationary pressure. Inflation has declined sharply and more than halved from its peak of 9.1% in June 2022.
However, it remains elevated from the Fed’s 2% target. Although several market participants are optimistic that the interest rate hike campaign could soon be stopped by the Fed, lawmakers have kept themselves open for more hikes.
The Fed has increased interest rates by 525 basis points since March 2022, taking its benchmark interest rates to the range of 5.25-5.5%. However, the consumer price index (CPI) increased 3.2% in July after rising 3% in June. Although the increase is modest and lower than economists’ expectations of a rise of 3.3%, the present scenario gives the Fed ample reasons to continue with its rate hikes.
Moreover, the majority of Fed officials are of the opinion that a slowdown in real GDP growth and a weakening of labor market conditions are necessary to ease inflationary pressures. However, the current state of the economy shows ongoing progress, and the labor market remains resilient.
Moreover, it is unlikely that the first interest rate cut will come into effect before 2025, although market participants believe it might come in 2024.
Given this scenario, investors should bet on large-cap value funds in order to mitigate risk. Large-cap equities have a proven history of success and are more dependable than mid- or small-cap stocks.
Moreover, value funds, which consist of stocks typically trading below their fundamental metrics like earnings, book value, and debt-to-equity ratios, along with dividend payments, are favored by investors seeking favorable investment opportunities.
3 Best Choices
We've identified three such large-cap value mutual funds that have demonstrated impressive annualized returns over both 3-year and 5-year periods. These funds also hold a Zacks Mutual Fund Rank of #1 (Strong Buy), require an initial investment of no more than $5,000, and have a low expense ratio.
The question here is: why should investors consider mutual funds? Reduced transaction costs and diversification of portfolio without several commission charges that are associated with stock purchases are primarily why one should be parking money in mutual funds (read more: Mutual Funds: Advantages, Disadvantages, and How They Make Investors Money).
Columbia Select Large Cap Value Fund Class A (SLVAX - Free Report) fund seeks long-term capital appreciation. SLVAX generally invests at least 80% of its net assets in the common stocks of value companies with a large market capitalization of $2 billion or more. Columbia Select Large Cap Value Fund Class A fund may invest up to 15% of its net assets in illiquid securities and up to 10% of its total assets in foreign securities.
SLVAX’s 3-year and 5-year annualized returns are 16.1% and 8.7%, respectively. Columbia Select Large Cap Value Fund Class A fund has a Zacks Mutual Fund Rank #1 and an annual expense ratio of 0.42%, which is below the category average of 0.94%.
To see how this fund performed compared to its category, and other 1 and 2 Ranked Mutual Funds, please click here.
BNY Mellon Dynamic Value Fund (DAGVX - Free Report) seeks capital appreciation. DAGVX invests at least 80% of its assets in stocks. BNY Mellon Dynamic Value Fund invests in companies of any size, and uses a value approach in selecting stocks for investment.
DAGVX’s 3-year and 5-year annualized returns are 22.1% and 11%, respectively. BNY Mellon Dynamic Value Fund has a Zacks Mutual Fund Rank #1 and an annual expense ratio of 0.68%, which is below the category average of 0.94%.
To see how this fund performed compared to its category, and other 1 and 2 Ranked Mutual Funds, please click here.
ClearBridge Large Cap Value Fund (SAIFX - Free Report) seeks long-term growth of capital. Current income is the secondary objective. SAIFX invests in common stocks of established U.S. companies. ClearBridge Large Cap Value Fund may also invest in other equity securities and may invest in debt securities.
SAIFX’s 3-year and 5-year annualized returns are 14.4% and 9.6%, respectively. ClearBridge Large Cap Value Fund has a Zacks Mutual Fund Rank #1 and an annual expense ratio of 0.62%, which is below the category average of 0.94%.
To see how this fund performed compared to its category, and other 1 and 2 Ranked Mutual Funds, please click here.
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3 Solid Large-Cap Funds to Buy Amid Ongoing Market Volatility
Markets have been volatile over the past few weeks as investors are still trying to gauge the Fed’s next move with its current interest rate hike campaign. While many are hopeful that the central bank could soon end its interest rate hikes, Fed officials maintained their hawkish stance as they believe inflation is still elevated.
This has seen all three major indexes suffering over the past few weeks. The Dow and the S&P 500 ended last week down 2.2% and 2.1%, respectively. The Nasdaq ended 2.6% lower last week.
Interest Rate Hike Fears Grow
Fed officials remained hawkish in the July meeting, saying, “further tightening of monetary policy” is needed to ease inflationary pressure. Inflation has declined sharply and more than halved from its peak of 9.1% in June 2022.
However, it remains elevated from the Fed’s 2% target. Although several market participants are optimistic that the interest rate hike campaign could soon be stopped by the Fed, lawmakers have kept themselves open for more hikes.
The Fed has increased interest rates by 525 basis points since March 2022, taking its benchmark interest rates to the range of 5.25-5.5%. However, the consumer price index (CPI) increased 3.2% in July after rising 3% in June. Although the increase is modest and lower than economists’ expectations of a rise of 3.3%, the present scenario gives the Fed ample reasons to continue with its rate hikes.
Moreover, the majority of Fed officials are of the opinion that a slowdown in real GDP growth and a weakening of labor market conditions are necessary to ease inflationary pressures. However, the current state of the economy shows ongoing progress, and the labor market remains resilient.
Moreover, it is unlikely that the first interest rate cut will come into effect before 2025, although market participants believe it might come in 2024.
Given this scenario, investors should bet on large-cap value funds in order to mitigate risk. Large-cap equities have a proven history of success and are more dependable than mid- or small-cap stocks.
Moreover, value funds, which consist of stocks typically trading below their fundamental metrics like earnings, book value, and debt-to-equity ratios, along with dividend payments, are favored by investors seeking favorable investment opportunities.
3 Best Choices
We've identified three such large-cap value mutual funds that have demonstrated impressive annualized returns over both 3-year and 5-year periods. These funds also hold a Zacks Mutual Fund Rank of #1 (Strong Buy), require an initial investment of no more than $5,000, and have a low expense ratio.
The question here is: why should investors consider mutual funds? Reduced transaction costs and diversification of portfolio without several commission charges that are associated with stock purchases are primarily why one should be parking money in mutual funds (read more: Mutual Funds: Advantages, Disadvantages, and How They Make Investors Money).
Columbia Select Large Cap Value Fund Class A (SLVAX - Free Report) fund seeks long-term capital appreciation. SLVAX generally invests at least 80% of its net assets in the common stocks of value companies with a large market capitalization of $2 billion or more. Columbia Select Large Cap Value Fund Class A fund may invest up to 15% of its net assets in illiquid securities and up to 10% of its total assets in foreign securities.
SLVAX’s 3-year and 5-year annualized returns are 16.1% and 8.7%, respectively. Columbia Select Large Cap Value Fund Class A fund has a Zacks Mutual Fund Rank #1 and an annual expense ratio of 0.42%, which is below the category average of 0.94%.
To see how this fund performed compared to its category, and other 1 and 2 Ranked Mutual Funds, please click here.
BNY Mellon Dynamic Value Fund (DAGVX - Free Report) seeks capital appreciation. DAGVX invests at least 80% of its assets in stocks. BNY Mellon Dynamic Value Fund invests in companies of any size, and uses a value approach in selecting stocks for investment.
DAGVX’s 3-year and 5-year annualized returns are 22.1% and 11%, respectively. BNY Mellon Dynamic Value Fund has a Zacks Mutual Fund Rank #1 and an annual expense ratio of 0.68%, which is below the category average of 0.94%.
To see how this fund performed compared to its category, and other 1 and 2 Ranked Mutual Funds, please click here.
ClearBridge Large Cap Value Fund (SAIFX - Free Report) seeks long-term growth of capital. Current income is the secondary objective. SAIFX invests in common stocks of established U.S. companies. ClearBridge Large Cap Value Fund may also invest in other equity securities and may invest in debt securities.
SAIFX’s 3-year and 5-year annualized returns are 14.4% and 9.6%, respectively. ClearBridge Large Cap Value Fund has a Zacks Mutual Fund Rank #1 and an annual expense ratio of 0.62%, which is below the category average of 0.94%.
To see how this fund performed compared to 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 >>