Large-cap funds are considered prudent choices for risk-averse investors when compared with 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 the growth ones across all asset classes and are 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.
Principal LargeCap Value J (PVLJX - Free Report) invests the majority of its assets in equity securities of large-cap companies on the Russell 1000 Value Index. According to the index, large-cap companies are those whose market-cap ranges between $394.9 million and $634.4 billion. PVLJX seeks capital appreciation for the long run. Principal LargeCap Value J has returned 14.9% in the last one year.
As of December 2017, PVLJX held 82 issues, with 4.51% of its assets invested in Johnson & Johnson.
Vanguard US Value Investor (VUVLX - Free Report) seeks growth of capital and income for the long run. VUVLX invests all of its assets in value companies having low price/earnings (P/E) ratios. The fund focuses on acquiring stocks of large and mid-cap companies having impressive growth potential and favorable valuations. Vanguard US Value Investor has one-year annualized returns of 9.9%.
Binbin Guo is one of the fund managers of VUVLX since 2016.
DFA US Large Cap Value III (DFUVX - Free Report) attains its investment objective by investing almost all its assets in its master fund, the U.S. Large Cap Value Series, which in turn allocates its assets in securities of large-cap U.S. companies that are believed to be undervalued. DFUVX seeks growth of capital for the long run. DFA US Large Cap Value III returned 16.9% in the last one year.
DFUVX has an expense ratio of 0.13% compared with a category average of 1.05%.
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 large-cap value funds.
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