Risk-averse investors generally consider large-cap value funds as a strong investment choice over small cap and mid cap funds. These funds have exposure to large cap stocks, with a long-term performance history and more stability than what mid caps or small caps offer. 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.
Meanwhile, 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 growth ones across all asset classes and less vulnerable to trending markets. However, investors interested in choosing value funds for yield, should check the mutual fund yield as not all value funds comprise solely 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.
Vanguard High Dividend Yield Index Investor (VHDYX - Free Report) employs an indexing investment approach designed to track the performance of the FTSE High Dividend Yield Index. VHDYX generally focuses on investing in common stocks of those companies that are expected to offer a high dividend yield. Vanguard High Dividend Yield Index Investor has returned 6.2% year to date.
VHDYX has an expense ratio of 0.15% compared with the category average of 1.10%.
TIAA-CREF Large-Cap Value Retirement (TRLCX - Free Report) seeks impressive total return over the long run through growth of capital. TRLCX invests a large chunk of its assets in large-cap companies, which are listed on the Russell 1000 Value Index. The fund may also invest not more than one-fifth of its assets in securities of non-US companies. TIAA-CREF Large-Cap Value Retirement has returned 6.3% year to date.
As of May 2017, TRLCX held 179 issues, with 2.62% of its assets invested in Bank of America Corporation.
JPMorgan Large Cap Value A (OLVAX - Free Report) seeks capital appreciation. OLVAX invests a major portion of its assets in securities of large-cap companies that include common stocks, debt and preferred stocks that can be converted to common stocks. Large-cap companies are those that have market capitalization equivalent to those listed on the Russell 1000 Value Index at the time of purchase. JPMorgan Large Cap Value A has returned 7.9% year to date.
Scott Blasdell is the fund manager of OLVAX since 2013.
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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