The U.S. economy continues to grow, although the pace appears to be moderating. Investors are gravitating toward growth-sensitive sectors like technology and discretionary stocks, which are likely to benefit from a Federal Reserve rate cut. In line with Wall Street’s expectations, the Fed cut interest rates by a quarter percentage point at its December meeting, lowering the target range to 3.50-3.75%. Three consecutive interest rate cuts this year are aimed at stabilizing the labor market while inflation resumed its downward trend toward 2% target.

Data released following the 43-day-long government shutdown shows that the Fed’s preferred inflation gauge, the Personal Consumption Expenditures (PCE) Price Index, held steady at 0.3% in September, matching the gain in August. On a year-over-year basis, PCE rose 2.8% in September from a 2.7% increase in August. However, the decline in the core PCE index’s annual rate to 2.8% in the 12 months through September — after rising 2.9% for two consecutive months — suggests that inflation is gradually easing.

The labor market has lately shown signs of gradual cooling, as surveys indicate a downward trend in both the supply and demand for workers. According to a report from the Labor Department's Bureau of Labor Statistics, job openings increased by 12,000 to 7.67 million as of the last day of October. The job vacancy rate remained unchanged at 4.6%, while hiring decreased by 218,000 to 5.149 million. The unemployment rate rose to a four-year high of 4.4% in September. The number of Americans filing new applications for unemployment benefits surged to a 4.5-year high, reaching 236,000 for the week ending Dec. 6, versus the Street’s estimate of 220,000. This indicates a sharp deterioration in the labor market.

Amid such market conditions, risk-averse investors who seek returns subject to low risk may opt for large-cap value mutual funds, such as Tcw Relative Value Large Cap Fund (TGDVX Quick QuoteTGDVX - Free Report) ,Putnam Large Cap Value Fund (PEQSX Quick QuotePEQSX - Free Report) , Fidelity Series Stock Selector Large Cap Value Fund (FBLEX Quick QuoteFBLEX - Free Report) , Blackrock Large Cap Focus Value Fund (MDBAX Quick QuoteMDBAX - Free Report) and Nuveen Large Cap Value Fund Premier (TRCPX Quick QuoteTRCPX - Free Report) as the major holdings to achieve their objective.

Why Invest in Large-Cap Value Mutual Funds?

While mutual funds investing in value stocks have the potential to deliver higher returns and exhibit lower volatility compared to growth and blend counterparts, large-cap funds usually provide a safer option than small-cap or mid-cap funds. Thus, investors may look for large-cap value funds to earn in a moderate-return, volatile environment.

Value funds generally invest in stocks that tend to trade at a price lower than their fundamentals (i.e., earnings, book value, debt-equity) and pay out dividends. Value stocks are expected to outperform the growth ones across all asset classes when considered on a long-term investment horizon and are less susceptible to trending markets.

Meanwhile, large-cap funds have exposure to large-cap stocks that are expected to provide a long-term performance history and assure more stability than what mid or small caps offer. Companies with a market capitalization of more than $10 billion are generally considered large caps. However, due to their significant international exposure, large-cap companies might be affected by a global downturn.

We have thus selected five large-cap value mutual funds that boast a Zacks Mutual Fund Rank #1 (Strong Buy), have positive three-year and five-year annualized returns and minimum initial investments within $5000, and carry a low expense ratio of less than 1%. Notably, mutual funds, in general, reduce transaction costs and diversify portfolios without an array of commission charges mostly associated with stock purchases (read more: Mutual Funds: Advantages, Disadvantages, and How They Make Investors Money).

Our Picks

Tcw Relative Value Large Cap Fund invests most of its assets, along with borrowing, if any, inequity securities of large-capitalization companies. TGDVX advisors consider large-cap companies as those with market capitalization within the range of companies listed on the Russell 1000 Index at the time of purchase.

Matthew J. Spahn has been the lead manager of TGDVX since March 31, 2003. Most of the fund’s exposure is in companies like JPMorgan Chase (4.6%), International Business Machines (4.1%), and Intercontinental Exchange (3.9%) as of July 31, 2025.

TGDVX’s three-year and five-year annualized returns are 18.2% and 18.6%, respectively. TGDVX has an annual expense ratio of 0.85%.

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 Fund invests primarily in common stocks of domestic companies that offer the potential for capital growth, current income, or both. PEQSX advisors choose to invest in stocks based on valuation, financial strength, growth potential, competitive position in its industry, projected future earnings, cash flows and dividends.

Darren Jaroch has been the lead manager of PEQSX since Aug. 29, 2012. Most of the fund’s exposure is in companies like Citigroup (3.6%), Microsoft (3%) and Amazon.com (2.7%) as of July 31, 2025

PEQSX’s three-year and five-year annualized returns are 17.2% and 18.3%, respectively. PEQSX has an annual expense ratio of 0.26%.

Fidelity Series Stock Selector Large Cap Value Fund invests most of its net assets in stocks of large-cap companies with market capitalization similar to companies listed on the Russell 1000 Index or the S&P 500 Index. FBLEX advisors prefer to invest in undervalued companies compared to others in the same industry in relation to factors such as assets, sales, earnings, growth potential, or cash flow compared to other companies in the same industry.

Matthew Friedman has been the lead manager of FBLEX since Dec. 6, 2012. Most of the fund’s exposure is in companies like Alphabet (3%), Amazon.com (2.7%) and Exxon Mobil (2.4%) as of July 31, 2025.

FBLEX’s three-year and five-year annualized returns are 16.4% and 17.2%, respectively. FBLEX has an annual expense ratio of 0.0%.

Blackrock Large Cap Focus Value Fund invests most of its assets, along with borrowings, in equity securities of large-cap value companies. MDBAX advisors also invest in derivative products.

Tony DeSpirito has been the lead manager of MDBAX since Nov. 15, 2019. Most of the fund’s exposure is in companies such as Citigroup (4%), Wells Fargo (3.9%) and Samsung Electronics (3.5%) as of June 30, 2025.

MDBAX has 3-year and 5-year annualized returns are 15.7% and 16.7%, respectively. MDBAX has an annual expense ratio of 0.81%.

Nuveen Large Cap Value Fund Premier invests most of its assets, along with borrowings, if any, in equity securities of large-capitalization value companies. TRCPX advisors may also invest a small portion of its net assets in foreign investments.

Charles J Carr has been the lead manager of TRCPX since Nov. 15, 2018. Most of the fund’s exposure is in companies like JPMorgan Chase (4.1%), Alphabet (2.9%) and Berkshire Hathaway (2.4%) as of July 31, 2025.

TRCPX’s three-year and five-year annualized returns are 14.8% and 15.7%, respectively. TRCPX has an annual expense ratio of 0.55%.

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