Large cap funds are considered a wise investment choice 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 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.
American Century Large Company Value Investor ALVIX seeks appreciation of capital for the long run. ALVIX invests a bulk of its assets in equity securities of large-cap companies that fall within the range of the Russell 1000 Index. American Century Large Company Value Investor returned 17% over the last one-year period.
ALVIX has an expense ratio of 0.84% compared with the category average of 1.06%.
American Funds American Mutual F1 AMFFX invests heavily in common stocks of companies based in the U.S. and Canada. These companies contribute in the growth of the U.S. economy. AMFFX also invests in debt securities and bonds which include those issued by the U.S. government and several federal agencies. The fund seeks growth of income and capital as well as preservation of capital. American Funds American Mutual F1 returned 13.8% over the last one-year period.
As of March 2017, AMFFX held 251 issues, with 3.57% of its assets invested in
Verizon Communications Inc.
Becker Value Equity Retail BVEFX seeks growth of capital for the long run. BVEFX invests a major portion of its assets in common and preferred stocks which are undervalued and have low price-to-earnings ratios. Becker Value Equity Retail returned 18.3% over the last one-year period.
Michael McGarr is one of the fund managers of BVEFX since 2003.
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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