President Donald Trump announced sweeping reciprocal tariffs on Wednesday aimed at addressing the United States’ $1.2 trillion trade deficit. The timing of the announcement was strategic, as it was made after the stock markets had closed.

However, after Trump’s announcement, the Dow futures plunged 2%, while the S&P 500 and the Nasdaq 100 futures dropped 2.7% and 3.6%, respectively. Investors are now bracing for significant market volatility, as these tariffs could trigger a global trade conflict.

In such a turbulent economic climate, it would be safe for investors to opt for large-cap value funds to safeguard their investments. Three such funds are Northern Income Equity (NOIEX Quick QuoteNOIEX - Free Report) , Putnam Large Cap Value A (PEYAX Quick QuotePEYAX - Free Report) and VALIC Company I Systematic Value Fund (VBCVX Quick QuoteVBCVX - Free Report) .

Market Turbulence Looms as Trump Announces Tariffs

On Wednesday, Trump imposed a baseline 10% tariff on all countries, set to take effect on April 5.  He also announced additional “reciprocal” tariffs on nations the administration deems the worst offenders in trade policies, such as Japan, Israel and the European Union, effective April 9.

This new 10% tariff is nearly three times the average U.S. tariff rate prior to Trump’s return to office in January. Earlier in the day, investors were optimistic that the tariffs would not be excessively harsh, as that could push the economy into recession and send inflation higher. However, after Trump’s unexpected announcement, markets are now bracing for heightened uncertainty.

The goal of these tariffs is to encourage domestic manufacturing and bring production back to the United States. However, the aggressive approach has raised concerns about a potential global trade war, with other countries already threatening retaliatory tariffs.

Since February, stock markets have faced challenges, with both the S&P 500 and the Nasdaq entering correction territory. Inflation has also been steadily rising, and these new tariffs could push it even higher. If inflation continues to climb, the Federal Reserve may have to postpone its anticipated interest rate cuts, prolonging economic uncertainty.

3 Best Choices

We've identified three large-cap value mutual funds that have given impressive annualized returns over 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).

Northern Income Equity fund seeks to provide a high level of current income with long-term capital appreciation as a secondary objective. NOIEX’s approach is to identify the securities of companies that generate high current yields and offer prospects for growth and possible capital appreciation. In pursuing its objective, the Northern Income Equity fund invests at least 65% of its total assets in a mix of income-producing equity securities, with no limit on the fund's ability to invest in non-investment-grade fixed-income and convertible debt securities.

NOIEX’s 3-year and 5-year annualized returns are 12.3% and 16.2%, respectively. Northern Income Equity fund has a Zacks Mutual Fund Rank #1 and an annual expense ratio of 0.49%.

To see how this fund performed compared to its category, and other 1 and 2 Ranked Mutual Funds, please click here.

Putnam Large Cap Value A fund seeks current income. Capital growth is a secondary objective when consistent with seeking current income. PEYAX invests mainly in common stocks of U.S. companies, with a focus on value stocks that offer the potential for current income and capital growth.

PEYAX’s 3-year and 5-year annualized returns are 12.7% and 16.1%, respectively. Putnam Large Cap Value A fund has a Zacks Mutual Fund Rank #1 and an annual expense ratio of 0.88%.

To see how this fund performed compared to its category, and other 1 and 2 Ranked Mutual Funds, please click here.

VALIC Company I Systematic Value Fund primarily invests in equity securities of U.S. large- and mid-cap companies, selected on their inclusion in the Russell 1000 Value Index, which identifies companies with value characteristics such as lower price-to-book ratios and lower expected growth values.

VBCVX’s 3-year and 5-year annualized returns are 10% and 12.5%, respectively. VALIC Company I Systematic Value Fundhas a Zacks Mutual Fund Rank #1 and an annual expense ratio of 0.54.

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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