U.S. markets remain volatile. Three benchmark indexes, the Nasdaq Composite, the S&P 500, and the Dow Jones Industrial Average, ended March with a massive rally despite struggles in the first quarter. The primary concern at present is the ongoing conflict in Iran. Investors are eagerly awaiting the easing of tensions so that the Strait of Hormuz opens, oil prices plummet, and stocks surge. However, ongoing military threats keep the market on edge, as spiking energy costs could severely hurt future corporate profits and drive inflation.
Underneath this geopolitical crisis in the Middle East, the U.S. economy remains resilient. The job market remains healthy, with strong hiring in health care and small businesses helping to rein in unemployment. Consumer confidence and retail sales are also holding steady, indicating that Americans are continuing to spend. The markets are reacting quickly to geopolitical updates, but a stable economic backdrop and strong demand for value stocks continue to offer support.
Amid such market conditions, investors who seek higher returns than large-cap funds but less volatility than the small-cap ones can opt for mid-cap mutual funds, such as Tcw Relative Value Mid Cap Fund TGVOX, Fidelity Value FDVLX, Vanguard Whitehall Funds, Selected Value Fund VASVX and Principal MidCap Value PMPRX as their major holdingsto achieve the investment objective.
These funds have the majority of their investments in sectors such as technology, finance, consumer durables and industrial cyclical, which will help investors with long-term growth and preservation of wealth.
Why Invest in Mid-Cap Value Mutual Funds?
Mid-cap value mutual funds provide excellent opportunities to seek returns with lesser risk by offering exposure to stocks that are available at a discounted price. While large companies are normally known for stability and the smaller ones for growth, mid-caps offer growth and stability simultaneously. Companies with market capitalization between $2 billion and $10 billion are generally considered mid-cap.
Value mutual funds are those that invest in stocks trading at discounts to their book value and have a low price-to-earnings ratio, along with high dividend yields. Value investing is always a coveted strategy, and for good reason. After all, who doesn’t want to add stocks that have low PEs, a solid outlook and decent dividends? However, not all value funds solely comprise companies that primarily use their earnings to pay out dividends. Investors interested in choosing value funds for yield should surely check the mutual fund yield.
We have thus selected four mid-cap value mutual funds that boast a Zacks Mutual Fund Rank #1 (Strong Buy), have positive three-year and five-year annualized returns and minimum initial investments of $5000, and carry a low expense ratio. Notably, mutual funds, in general, reduce transaction costs and diversify portfolios without an array of commission charges mostly associated with stock purchases (read more: Mutual Funds: Advantages, Disadvantages, and How They Make Investors Money).
Tcw Relative Value Mid Cap Fund invests most of its assets, along with borrowings, if any, in equity securities of mid-cap companies, which, according to its portfolio manager, are value companies. TGVOX advisors consider value companies as those that have fallen out of favor and whose stocks are selling below their real value.
Mona Eraiba has been the lead manager of TGVOX since April 3, 2020. Most of the fund’s investments were in companies like Jones Lang LaSalle (4%), Popular (3.7%) and Arcosa (3.5%) as of Oct. 31, 2025.
TGVOX has three-year and five-year annualized returns of 18.5% and 12.4%, respectively. TGVOX has an annual expense ratio of 0.85%.
To see how this fund performed compared to its category, and other 1 and 2 Ranked Mutual Funds, please click here.
Fidelity Value fund invests in common stocks of medium-sized companies that possess fixed assets or are undervalued with respect to factors such as assets, earnings or growth potential based on the research of Fidelity Management & Research Company LLC (FMR). FDVLX advisors preferably invest in medium-sized companies of domestic or foreign issues.
Matthew Friedman has been the lead manager of FDVLX since May 13, 2010. Most of the fund’s investments were in companies like Western Digital (1.5%), PG&E (1.2%) and Eversource Energy (1.1%) as of Oct. 30, 2025.
FDVLX has three-year and five-year annualized returns of 14.4% and 12.6%, respectively. FDVLX has an annual expense ratio of 0.68%.
Vanguard Whitehall Funds, Selected Value Fund invests most of its net assets in mid-cap domestic companies, which, according to the advisor, are undervalued. VASVX advisors can also invest a small portion of its net assets in depositary receipts and foreign issues that are traded on U.S. or foreign markets.
Richard L. Greenberg has been the lead manager of VASVX since Feb. 25, 2005. Most of the fund’s investments were in companies like Aercap Holdings (2.5%), Corebridge Financial (1.6%) and Gildan Activewear (1.5%) as of Oct. 31, 2025.
VASVX has three-year and five-year annualized returns of 13.9% and 11.8%, respectively. VASVX has an annual expense ratio of 0.34%.
Principal MidCap Value fund invests most of its assets, along with borrowings, if any, in equity securities of medium-cap value companies. PMPRX advisors prefer to invest in companies that, according to them, are undervalued.
Michael Messina has been the lead manager of PMPRX since March 31, 2025. Most of the fund’s investments were in companies like Alliant Energy (1.8%), Keysight Technologies (1.7%) and MKS (1.4%) as of Oct. 31, 2025.
PMPRX has three-year and five-year annualized returns of 11.2% and 9.9%, respectively. PMPRX has an annual expense ratio of 1.20%.
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