Investors who are looking for a bargain — stocks trading at a discount — are mostly interested in value funds, which pick stocks that tend to trade at a price that does not fully account for their fundamentals (i.e. earnings, book value, debt-equity) and pay out dividend. In the long run, value stocks are expected to outperform the growth ones across all asset classes and are less vulnerable to the trending markets. However, investors interested in choosing value funds for yield, should check the mutual fund yield as not all value funds solely comprise companies that primarily use their earnings to pay out dividend.
Meanwhile, large-cap funds are better than small or mid-cap funds for risk-averse investors. These funds have exposure to large-cap stocks, with a long-term performance history and more stability than what mid 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.
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.
DFA US Large Cap Value II (DFCVX - Free Report) invests a large portion of its assets in securities of large-cap U.S. companies. DFCVX invests all of its assets in its master fund –– The U.S. Large Cap Value of The DFA Investment Trust Company. The fund seeks capital appreciation for the long run. DFA US Large Cap Value II has returned 12.3% over the last one year.
Jed Fogdall is one of the fund managers of DFCVX since February 2012.
Vanguard Value Index Investor (VIVAX - Free Report) invests nearly all its assets in stocks of companies that are included on the CRSP US Large Cap Value Index. VIVAX seeks to replicate the performance of the index by investing a proportion of its assets in each stock as its weighting in the index. The Vanguard Value Index Investor fund has one-year annualized returns of 10.7%.
VIVAX has an expense ratio of 0.18% compared with a category average of 0.60%.
JPMorgan Intrepid Value R5 (JIVRX - Free Report) seeks growth of capital for the long run. JIVRX invests a bulk of its assets in equity securities of both large- and mid-cap companies that are expected to possess strong momentum, attractive valuations and high quality. JPMorgan Intrepid Value R5has returned 13.5% over the last one year.
As of February 2018, JIVRX held 129 issues, with 4.27% of its assets invested in Bank of America Corporation.
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 funds.
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