3 Large-Cap Value Funds for Scintillating Returns
Large-cap funds are better choices 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 a market capitalization of more than $10 billion are generally considered large caps. 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 comprise 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 only 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 peers in the future. Investors can click here to see the complete list of funds.
American Funds Washington Mutual Investors Fund Class A AWSHX aims to produce income and provide an opportunity for growth of principal. The fund manager aims to maintain a fully invested, diversified portfolio, consisting primarily of high-quality common stocks. AWSHX has returned 9.7% over the past three years.
AWSHX has an expense ratio of 0.59% compared with the category average of 0.91%.
MFS Equity Income Fund Class A EQNAX aims for total return via a combination of current income and capital appreciation. The fund invests majority of its assets in equity securities and in dividend-paying common stocks. It may also invest in assets of foreign securities and other types of income-producing securities, including convertible securities, preferred stocks, and equity interests in REITs. EQNAX has returned 4.7% over the past three years.
Jonathan W. Sage is one of the fund managers of EQNAX since 2012.
Fidelity Equity-Income Fund FEQIX aims to provide reasonable income along with the potential for capital appreciation. The fund invests majority of its assets in income-producing equity securities, which tend to lead to investments in large-cap value stocks. FEQIX has returned 6.3% over the past three years.
As of the end of August 2020, FEQIX held 123 issues, with 3.24% of its assets invested in Johnson & Johnson.
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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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.