Investors interested in deriving safer returns by allocating their assets in undervalued securities may consider mid-cap value mutual funds. While mid caps offer the best of both large- and small-cap mutual funds, allowing growth and stability simultaneously, value funds are known for income or yield. Value funds are those that tend to trade at prices lower than their fundamentals (i.e. earnings, book value, debt to equity). However, not all value funds solely comprise companies that primarily use their earnings to pay out dividends.
Meanwhile, companies with market capitalization between $2 billion and $10 billion are generally considered mid-cap firms. While these funds are expected to have a higher growth potential than the large-cap ones, they are believed to experience a lower level of volatility than their small-cap counterparts.
Below we share with you three top-rated mid-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 mid-cap value funds .
T. Rowe Price Mid-Cap Value TRMCX invests the majority of its assets in companies having a market capitalization within the range of the Russell Midcap Value Index or the S&P MidCap 400 Index. TRMCX seeks capital growth for the long run. T. Rowe Price Mid-Cap Value has one-year annualized returns of 10%.
David J. Wallack is the portfolio manager of TRMCX since 2000.
Bridge Builder Small/Mid Cap Value BBVSX seeks to offer an appreciation of capital. BBVSX invests a large chunk of its assets in securities of both small- and mid-cap companies. The fund invests in both domestic and foreign companies. Bridge Builder Small/Mid Cap Value has one-year annualized returns of 7.7%.
As of June 2018, BBVSX held 2,055 issues, with 0.96% of its assets invested in Fidelity National Information Services Inc.
AB Discovery Value A ABASX maintains a diversified portfolio by investing in equity securities of small- and mid-cap companies. The fund invests primarily in those companies that are included on the Russell 2500(R) Value Index. AB Discovery Value A has one-year annualized returns of 9.9%.
ABASX has an expense ratio of 1.13% as compared with the category average of 1.31%.
To view the Zacks Rank and past performance of all All-cap value mutual funds, investors can click here to see the complete list of all-cap value funds .
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