Large-cap value mutual funds provide excellent choices for investors who seek returns subject to low risk. 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. However, investors interested in choosing value funds for yield, should check the mutual fund yield as not all value funds solely comprise of companies that primarily use their earnings to pay out dividends.
Meanwhile, large-cap funds have exposure to large-cap stocks that are expected to have a long-term performance history and assure 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-rated, 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.
VALIC Company II Large Cap Value (MUTF:VACVX) seeks higher total return than the Russell 1000 Value Index. VACVX invests a large share of its assets in equity securities of large-cap companies with market capitalization more than the smallest member of the Russell 1000 Index. VALIC Company II Large Cap Value has a three-year annualized return of 8.6%.
VACVX has an expense ratio of 0.8% compared with the category average of 1.1%.
JPMorgan Large Cap Value A (MUTF:OLVAX) invests a large portion of its assets in securities of large-cap companies that include common stocks, and debt and preferred stocks that can be converted to common stock. Large cap companies are those that have market capitalization equivalent to those listed in the Russell 1000 Value Index at the time of purchase. OLVAX offers dividend quarterly and capital gains annually. JPMorgan Large Cap Value A has a three-year annualized return of 9.5%.
Scott Blasdell is the fund manager and has managed OLVAX since 2013.
PNC Large Cap Value I (MUTF:PLIVX) seeks long-term capital appreciation. PLIVX invests the majority of its assets in equity securities including common stocks and American Depositary Receipts (ADRs) of domestic large-cap companies. The fund is expected to maintain a diversified portfolio comprising undervalued securities. It may also invest in securities of companies located in foreign lands. PNC Large Cap Value I has a three-year annualized return of 10%.
PLIVX has an expense ratio of 0.98% compared with the category average of 1.1%.