Value stocks are stocks that tend to trade at a price that is lower than its fundamentals (i.e. earnings, book value, Debt-Equity). It is common for some investors to invest in value funds for the income or yield. However, not all value funds are comprised solely of companies that primarily use their earnings to pay dividends. Investors interested in choosing value funds for yield, should be sure to check the mutual fund yield. The mutual fund yield is the dividend payments divided by the value of the mutual fund's shares. The mutual fund yield is available on the mutual funds quote page on the Zacks website.
Below we will share with you 5 top rated value mutual funds . Each has earned a Zacks #1 Rank (Strong Buy) as we expect these mutual funds to outperform their peers in the future. To view the Zacks Rank and past performance of all value funds, investors can click here to see the complete list of funds .
Vanguard Value Index Investor (VIVAX) invests a large portion of its assets in stocks listed in the CRSP U.S. Large Cap Value Index. This benchmark index mostly consists of value stocks of large-capitalization U.S. companies. It applies indexing investment approach in order to track the performance of the index. The value mutual fund returned 17.7% in the last one year.
Gerard C. O'Reilly is the fund manager and has managed this fund since 1994.
Neuberger Berman Large Cap Value A (NPNAX) seeks long term capital appreciation. The fund invests a lion's share of its assets in value stocks of large cap companies having market capitalization similar to those included in the Russell 1000 Value Index at the time of purchase. It invests in undervalued companies that are believed to have solid earnings growth potential. It may also invest in non-US companies. The value mutual fund returned 9.3% in the last one year.
The fund has an expense ratio of 1.08% as compared to category average of 1.13%.
Natixis Vaughan Nelson Small Cap Value A (NEFJX) invests a major portion of its assets in equity securities of "small-cap companies". A small-cap company is believed to have market capitalization similar to those included in the Russell 2000 Value Index. It may also invest in real estate investment trusts, foreign securities, convertible preferred stock and convertible debt securities. The value mutual fund returned 13.5% in the last one year.
As of December 2014, this fund held 64 issues with 2.79% of its assets invested in Amsurg Corp
Homestead Value (HOVLX) seeks long-term capital growth. The fund invests a large portion of its assets in common stocks of companies selling below their fundamental value. These companies have market capitalizations of almost $2 billion. It uses earnings valuations, debt ratios, competitive advantages and various other parameters to determine whether a stock is undervalued. The value mutual fund returned 16.9% in the last one year.
The fund has an expense ratio of 0.64% as compared to category average of 1.13%.
Hotchkis & Wiley Value Opportunities A (HWAAX) invests mostly in common stock, preferred stock and convertible securities of companies of any size. The fund invests in those stocks whose future prospects are not fully recognized by the market. It also invests in investment grade instruments and "junk" bonds or high-yield bonds. It applies fundamental value investing approach to find out market inefficiencies due to irrational investor sentiment. The non-diversified value mutual fund returned 11.8% in the last one year.
As of December 2014, this fund held 71 issues with 10.89% of its assets invested in American International Group Inc
To view the Zacks Rank and past performance of all value mutual funds, investors can click here to see the complete list of funds .
About Zacks Mutual Fund Rank
By applying the Zacks Rank to mutual funds, investors can find funds that not only outpaced the market in the past but are also expected to outperform going forward. Learn more about the Zacks Mutual Fund Rank at www.zacks.com/funds/mutual-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.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
