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.
Meanwhile, 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 lower than 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 comprise solely companies that use their earnings primarily to pay out dividend.
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 funds.
Invesco Oppenheimer Value Fund Class A (CGRWX – Free Report) aims for growth of capital. The fund mostly invests in common stocks of companies that the portfolio managers evaluate as undervalued. The fund primarily invests in securities of large-capitalization value companies. CGRWX has returned 18.2% on a year-to-date basis.
Devin E. Armstrong is one of the fund managers of CGRWX since 2019.
Edgar Lomax Value Fund (LOMAX – Free Report) seeks capital appreciation over a long period with a focus on offering some income. This is a no-load fund that primarily invests in stocks of large-capitalization companies that it deems as undervalued. The fund’s objective is to generate the highest return that carries the lowest possible risk. LOMAX has returned 12.9% on a year-to-date basis.
LOMAX has an expense ratio of 0.70% as compared to the category average of 1.00%.
MFS Value Fund Class A(MEIAX – Free Report) seeks capital growth. The fund primarily invests in large-capitalization companies that can be deemed of as high-quality. The fund takes a flexible valuation approach while investing. In addition, the fund focuses on companies that it feels are undervalued. MEIAX has returned 20.6% on a year-to-date basis.
As of June 2019, MEIAX held 89 issues, with 4.53% of its assets invested in JPMorgan Chase & Co.
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.
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 >>