The U.S. Federal Reserve lowered its key interest rate by 50 basis points on Wednesday for the first time since 2020. The Fed had maintained its policy rate at 5.25-5.50% for 14 months, which is longer than three of the previous six rate pauses. This indicates a change in monetary policy direction.
In this current situation, large-cap value mutual funds are a compelling choice for investment. These funds concentrate on reputable companies that have a track record of financial stability and tend to thrive in times of economic unpredictability. When interest rates decrease, large-cap value stocks stand to gain from borrowing expenses, potentially increasing profits and dividend payments. Also, these firms typically maintain strong balance sheets and steady cash flows making them durable amid market fluctuations.
In light of the easing measures, investing in large-cap value mutual funds can provide a mix of stability and growth opportunities that make them a reliable option for investment.
We have chosen three large-cap value mutual funds, BNY Mellon Dynamic Value Fund DAGVX, Invesco Comstock ACSTX and O'Shaughnessy Market Leaders Value OFVIX, that investors should buy now for the long-term. These funds have a Zacks Mutual Fund Rank #1 (Strong Buy) or 2 (Buy), positive three-year and five-year annualized returns, minimum initial investments within $5000 and expense ratios considerably lower than the category average. So, these funds have provided a comparatively stronger performance and carry a lower fee.
BNY Mellon Dynamic Value Fund invests most of its assets in stocks and foreign securities. DAGVX advisors use a combination of quantitative and fundamental research to identify potential investments.
Brian Ferguson has been one of the lead managers of DAGVX since Sept. 30, 2003. Most of the fund's holdings were in companies like JPMorgan Chase & Co. (1.1%), Berkshire Hathaway Inc. (1%) and Danaher Corp (0.9%) as of May 31, 2024.
DAGVX’s 3-year and 5-year annualized returns are 12.4% and 15.8%, respectively, and its net expense ratio is 0.93%. DAGVX has a Zacks Mutual Fund Rank #1.
To see how this fund performed compared to its category, and other 1 and 2 Ranked Mutual Funds, please click here.
Invesco Comstock invests mainly in common stocks and in derivatives and other instruments that have economic characteristics similar to such stocks. ACSTX advisors also look to invest a small portion of their net assets in real estate investment trusts.
Kevin C. Holt has been one of the lead managers of ACSTX since Aug. 1, 1999. Most of the fund's holdings were in companies like Wells Fargo & Co (3.3%), Bank of America Corp (2.7%) and Philip Morris International Inc. (2.5%) as of April 30, 2024.
ACSTX’s 3-year and 5-year annualized returns are 10.9% and 14.2%, respectively, and its net expense ratio is 0.81%. ACSTX has a Zacks Mutual Fund Rank #1.
O'Shaughnessy Market Leaders Value invests in a diversified mix of common stocks and other equity securities from companies of various sizes. OFVIX advisors use a bottom-up, quantitative, factor-based approach for selecting securities, drawing on research and historical data analysis.
Scott Bartone has been one of the lead managers of OFVIX since Nov. 28, 2018. Most of the fund's holdings were in companies like Altria Group, Inc. (4.7%), Marathon Petroleum Corp (4.4%) and Builders FirstSource, Inc. (4.2%) as of April 30, 2024.
OFVIX’s 3-year and 5-year annualized returns are 10.3% and 14.4%, respectively, and its net expense ratio is 0.54%. OFVIX has a Zacks Mutual Fund Rank #1.
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