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3 Large-Cap Value Funds to Dodge Ongoing Market Volatility
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Wall Street has mostly had a great year so far. However, major indexes have shown volatility over the past few weeks on concerns over a slowing economy. On Friday, stocks pulled back after a weak jobs report escalated fears of a potential recession. While expectations of a Federal Reserve rate cut in September have provided some optimism, the struggling labor market continues to weigh heavily on sentiment.
In this environment, investors may want to consider investing in large-cap value funds like Bridge Builder Large Cap Value Fund (BBVLX - Free Report) , Northern Income Equity (NOIEX - Free Report) and American Funds American Mutual Fund Class F-1 (AMFFX - Free Report) .
Weak Jobs Report
The U.S. economy added just 22,000 jobs in August, far below the 75,000 expected by economists, while unemployment rose to 4.3%. This follows July’s 79,000 job gains, highlighting a clear slowdown in hiring.
Hourly wages rose 0.3% in August, in line with forecasts. However, it rose just 3.7% on a year-over-year basis, which was below expectations of a 3.8% rise. Major indexes retreated after the report was released, with the Dow and the S&P 500 down 0.5% and 0.3%, while the Nasdaq dipped less than 0.1%.
Economic Slowdown Concerns
Although inflation has eased significantly from its peak and is moving closer to the Fed’s 2% target, new tariffs introduced by President Donald Trump have once again created price pressures.
Inflation ticked higher in the past two months, compelling the Federal Reserve to delay its rate cut plans. Recently, however, the central bank signaled that it may ease rates in September, with markets pricing in an 89% probability of a 25 basis point cut, according to the CME Group’s FedWatch Tool.
Still, consumer confidence remains low, slipping to 97.4 in August from 98.7 in July, according to the Conference Board. With uncertainty around jobs, tariffs, and Fed policy, market volatility could linger in the months ahead.
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).
Bridge Builder Large Cap Value Fund 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 11% and 14.2%, respectively. BBVLX has a Zacks Mutual Fund Rank #2 and an annual expense ratio of 0.22%, which is lower than its category average.
To see how this fund performed compared in its category, and other 1 and 2 Ranked Mutual Funds, please click here.
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.
NOIEX’s 3-year and 5-year annualized returns are 16% and 15.9%, respectively. Northern Income Equity fund has a Zacks Mutual Fund Rank #1 and an annual expense ratio of 0.49%, which is lower than its category average.
To see how this fund performed compared to its category, and other 1 and 2 Ranked Mutual Funds, please click here.
American Funds American Mutual Fund Class F-1 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 11.3% and 12.4%, respectively. American Funds American Mutual Fund Class F-1 has a Zacks Mutual Fund Rank #1 and an annual expense ratio of 0.64%, which is lower than its category average.
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 Large-Cap Value Funds to Dodge Ongoing Market Volatility
Wall Street has mostly had a great year so far. However, major indexes have shown volatility over the past few weeks on concerns over a slowing economy. On Friday, stocks pulled back after a weak jobs report escalated fears of a potential recession. While expectations of a Federal Reserve rate cut in September have provided some optimism, the struggling labor market continues to weigh heavily on sentiment.
In this environment, investors may want to consider investing in large-cap value funds like Bridge Builder Large Cap Value Fund (BBVLX - Free Report) , Northern Income Equity (NOIEX - Free Report) and American Funds American Mutual Fund Class F-1 (AMFFX - Free Report) .
Weak Jobs Report
The U.S. economy added just 22,000 jobs in August, far below the 75,000 expected by economists, while unemployment rose to 4.3%. This follows July’s 79,000 job gains, highlighting a clear slowdown in hiring.
Hourly wages rose 0.3% in August, in line with forecasts. However, it rose just 3.7% on a year-over-year basis, which was below expectations of a 3.8% rise. Major indexes retreated after the report was released, with the Dow and the S&P 500 down 0.5% and 0.3%, while the Nasdaq dipped less than 0.1%.
Economic Slowdown Concerns
Although inflation has eased significantly from its peak and is moving closer to the Fed’s 2% target, new tariffs introduced by President Donald Trump have once again created price pressures.
Inflation ticked higher in the past two months, compelling the Federal Reserve to delay its rate cut plans. Recently, however, the central bank signaled that it may ease rates in September, with markets pricing in an 89% probability of a 25 basis point cut, according to the CME Group’s FedWatch Tool.
Still, consumer confidence remains low, slipping to 97.4 in August from 98.7 in July, according to the Conference Board. With uncertainty around jobs, tariffs, and Fed policy, market volatility could linger in the months ahead.
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).
Bridge Builder Large Cap Value Fund 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 11% and 14.2%, respectively. BBVLX has a Zacks Mutual Fund Rank #2 and an annual expense ratio of 0.22%, which is lower than its category average.
To see how this fund performed compared in its category, and other 1 and 2 Ranked Mutual Funds, please click here.
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.
NOIEX’s 3-year and 5-year annualized returns are 16% and 15.9%, respectively. Northern Income Equity fund has a Zacks Mutual Fund Rank #1 and an annual expense ratio of 0.49%, which is lower than its category average.
To see how this fund performed compared to its category, and other 1 and 2 Ranked Mutual Funds, please click here.
American Funds American Mutual Fund Class F-1 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 11.3% and 12.4%, respectively. American Funds American Mutual Fund Class F-1 has a Zacks Mutual Fund Rank #1 and an annual expense ratio of 0.64%, which is lower than its category average.
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 >>