The U.S. economy is currently navigating a challenging trajectory that has been recently complicated by escalating conflict in the Middle East. Inflation worries and a cooling labor market are added headwinds that have sparked fears of stagflation (a combination of stalling economic growth, high unemployment and high inflation) amongst market participants. Intense market uncertainty and rising fear of a downturn due to oil supply disruptions have pushed the CBOE Volatility Index (VIX) to 29.49. VIX is Wall Street's “fear index," and a rapid spike in it indicates a significant increase in investor hedging demand and nervousness.

Military tensions in the Middle East caused oil prices to spike 36%, briefly hitting $120 before settling near $90. Meanwhile, inflation remains "sticky" at 2.4% due to the high cost of gas and rent. The job market is also cooling as unemployment rose to 4.4% after the United States lost 92,000 jobs in February, partly due to strikes and storms. Due to these mixed signals, analysts expect the Federal Reserve to most likely keep interest rates unchanged in its upcoming Federal Open Market Committee (FOMC) meeting. The Fed is attempting to support a slowing economy without allowing inflation to escalate again.

Amid such market conditions, risk-averse investors who seek returns subject to low risk may opt for large-cap value mutual funds, such as Northern Funds Income Equity Fund (NOIEX Quick QuoteNOIEX - Free Report) , Putnam Large Cap Value (PEYAX Quick QuotePEYAX - Free Report) , Tcw Relative Value Large Cap Fund (TGDVX Quick QuoteTGDVX - Free Report)  and Blackrock Large Cap Focus Value Fund (MDBAX Quick QuoteMDBAX - Free Report) as the major holdingsto 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 four 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

Northern Funds Income Equity Fund seeks a high level of current income compared to other mutual funds by investing most of its net assets in income-producing equity securities, which include dividend-paying common and preferred stocks. NOIEX advisors also invest in derivatives such as stock index futures contracts to equitize cash and boost portfolio liquidity.

Reed A. LeMar has been the lead manager of NOIEX since July 31, 2017. Most of the fund’s exposure is in companies like NVIDIA (8.8%), Apple (8.1%) and Microsoft (5.5%) as of Dec. 31, 2025.

NOIEX’s three-year and five-year annualized returns are 21.5% and 14.9%, respectively. NOIEX has 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 fund invests most of its net assets in common stocks of U.S. companies that, according to its advisors, are currently undervalued by the market and have potential for capital growth, current income, or both. PEYAX advisors choose to invest in companies 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 PEYAX since Aug. 29, 2012. Most of the fund’s exposure is in companies like Citigroup (3.7%), Alphabet (3.7%) and Microsoft (2.8%) as of Oct. 31, 2025.

PEYAX’s three-year and five-year annualized returns are 19.2% and 15.2%, respectively. PEYAX has an annual expense ratio of 0.85%.

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 Intel (4.6%), JPMorgan Chase(4.4%) and McKesson (3.9%) as of Oct. 31, 2025.

TGDVX’s three-year and five-year annualized returns are 18.8% and 13.4%, respectively. TGDVX has an annual expense ratio of 0.85%.

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 Wells Fargo (4%), Amazon.com (3.5%) and Citigroup (3.5%) as of Dec. 31, 2025.

MDBAX has three-year and five-year annualized returns are 16.6% and 12.9%, respectively. MDBAX has an annual expense ratio of 0.80%.

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 >>