We use cookies to understand how you use our site and to improve your experience.
This includes personalizing content and advertising.
By pressing "Accept All" or closing out of this banner, you consent to the use of all cookies and similar technologies and the sharing of information they collect with third parties.
You can reject marketing cookies by pressing "Deny Optional," but we still use essential, performance, and functional cookies.
In addition, whether you "Accept All," Deny Optional," click the X or otherwise continue to use the site, you accept our Privacy Policy and Terms of Service, revised from time to time.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
3 Large-Cap Value Funds to Buy as Consumer Confidence Hits New Low
Read MoreHide Full Article
Americans’ confidence in the economy hit its lowest level in months in August, as growing concerns about high inflation and the outlook for the labor market weighed on sentiment. Fears that oil prices could climb further and fuel inflation have also increased as uncertainty over prolonged tensions in the Middle East persists.
Financial markets have remained volatile through much of July and August, and investors are still waiting for greater clarity on the Federal Reserve’s future interest-rate policy.
Given this backdrop, investors may consider investing in large-cap value funds, such as VALIC Company I Systematic Value Fund (VBCVX - Free Report) , Northern Income Equity (NOIEX - Free Report) and Federated Hermes MDT Large Cap Value Svc (FSTKX - Free Report) .
Consumer Confidence Falls to a New Low
The Conference Board reported on Tuesday that its consumer confidence index fell to 89.4 in August from a downwardly revised 90.2 in July. The reading marked the lowest level since January and came in well below the consensus estimate of 90.2.
Concerns about the health of the economy have been increasing as investors remain focused on inflation. A jump in oil prices after the war between the United States and Iran began in February pushed inflation higher again.
The consumer price index (CPI) rose 0.1% sequentially in July, while core CPI, which excludes volatile food and energy prices, increased 0.2%. On a year-over-year basis, CPI eased to 3.4% in July from 3.5% in June. Core CPI was 2.5% year over year in July, down 0.1 percentage point from June.
Despite the recent moderation, inflation remains well above the Federal Reserve’s 2% target. At the same time, concerns about the labor market outlook continue to weigh on consumers. The August decline in consumer confidence was largely caused by a sharp drop in the expectations index, which fell 7.8%. This more than offset the first increase in the current situation index since April.
With inflation, employment and monetary policy still uncertain, financial markets could remain volatile for an extended period.
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).
VALIC Company I Systematic Value Fund primarily invests in equity securities of U.S. large- and mid-cap companies, selected on their inclusion on the Russell 1000 Value Index, which identifies companies with value characteristics such as lower price-to-book ratios and lower expected growth values.
VBCVX’s 3-year and 5-year annualized returns are 19.1% and 12.8%, respectively. VALIC Company I Systematic Value Fundhas a Zacks Mutual Fund Rank #2 and an annual expense ratio of 0.65.
To see how this fund performed compared to 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 19.9% and 13.5%, respectively. Northern Income Equity fund has a Zacks Rank #1 and an annual expense ratio of 0.48%, 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.
Federated Hermes MDT Large Cap Value Svc fund's investment objective is to provide growth of income and capital. FSTKX pursues its investment objective by investing primarily in equity securities of companies that are generally leaders in their industries, are characterized by sound management and have the ability to finance expected growth.
FSTKX’s 3-year and 5-year annualized returns are 22.5% and 15.2%, respectively. Federated Hermes MDT Large Cap Value Svc fund has a Zacks Rank #2 and an annual expense ratio of 0.99%.
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 >>
View the Zacks #1 Rank List
Image: Bigstock
3 Large-Cap Value Funds to Buy as Consumer Confidence Hits New Low
Americans’ confidence in the economy hit its lowest level in months in August, as growing concerns about high inflation and the outlook for the labor market weighed on sentiment. Fears that oil prices could climb further and fuel inflation have also increased as uncertainty over prolonged tensions in the Middle East persists.
Financial markets have remained volatile through much of July and August, and investors are still waiting for greater clarity on the Federal Reserve’s future interest-rate policy.
Given this backdrop, investors may consider investing in large-cap value funds, such as VALIC Company I Systematic Value Fund (VBCVX - Free Report) , Northern Income Equity (NOIEX - Free Report) and Federated Hermes MDT Large Cap Value Svc (FSTKX - Free Report) .
Consumer Confidence Falls to a New Low
The Conference Board reported on Tuesday that its consumer confidence index fell to 89.4 in August from a downwardly revised 90.2 in July. The reading marked the lowest level since January and came in well below the consensus estimate of 90.2.
Concerns about the health of the economy have been increasing as investors remain focused on inflation. A jump in oil prices after the war between the United States and Iran began in February pushed inflation higher again.
The consumer price index (CPI) rose 0.1% sequentially in July, while core CPI, which excludes volatile food and energy prices, increased 0.2%. On a year-over-year basis, CPI eased to 3.4% in July from 3.5% in June. Core CPI was 2.5% year over year in July, down 0.1 percentage point from June.
Despite the recent moderation, inflation remains well above the Federal Reserve’s 2% target. At the same time, concerns about the labor market outlook continue to weigh on consumers. The August decline in consumer confidence was largely caused by a sharp drop in the expectations index, which fell 7.8%. This more than offset the first increase in the current situation index since April.
With inflation, employment and monetary policy still uncertain, financial markets could remain volatile for an extended period.
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).
VALIC Company I Systematic Value Fund primarily invests in equity securities of U.S. large- and mid-cap companies, selected on their inclusion on the Russell 1000 Value Index, which identifies companies with value characteristics such as lower price-to-book ratios and lower expected growth values.
VBCVX’s 3-year and 5-year annualized returns are 19.1% and 12.8%, respectively. VALIC Company I Systematic Value Fundhas a Zacks Mutual Fund Rank #2 and an annual expense ratio of 0.65.
To see how this fund performed compared to 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 19.9% and 13.5%, respectively. Northern Income Equity fund has a Zacks Rank #1 and an annual expense ratio of 0.48%, 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.
Federated Hermes MDT Large Cap Value Svc fund's investment objective is to provide growth of income and capital. FSTKX pursues its investment objective by investing primarily in equity securities of companies that are generally leaders in their industries, are characterized by sound management and have the ability to finance expected growth.
FSTKX’s 3-year and 5-year annualized returns are 22.5% and 15.2%, respectively. Federated Hermes MDT Large Cap Value Svc fund has a Zacks Rank #2 and an annual expense ratio of 0.99%.
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 >>