Large-cap value mutual funds generally provide favorable choices for investors who seek returns with low risk. While mutual funds investing in value stocks have the potential to deliver higher returns and exhibit lower volatility than growth or blend counterparts, large-cap funds are usually safer than small-cap or mid-cap funds. Thus investors may look for large-cap value funds to earn moderate returns in a volatile environment.
Value funds generally invest in stocks that tend to trade at a price lower than their fundamentals (i.e. earnings, book value, Debt-Equity) and pay out dividends. These are expected to outperform growth stocks across all asset classes when considered on a long-term investment horizon and are less susceptible to trending markets.
Meanwhile, large-cap funds have exposure to large-cap stocks that are expected to have a long-term performance history and assure more stability than what mid or small caps offer. Companies with market capitalization of more than $10 billion are generally considered large caps.
Below we share with you four top-rated, large-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 large-cap value mutual funds.
TIAA-CREF Large-Cap Value Retail (TCLCX) invests a major portion of its assets in large cap U.S. companies that are believed to be undervalued compare to their industry peers. TCLCX uses the market capitalization range of the Russell 1000 Value Index to select large cap companies. The fund may invest a maximum of 20% of its assets in non-U.S. securities. TIAA-CREF Large-Cap Value Retail returned 38% in the last one-year period.
As of December 2016, TCLCX held 184 issues with 3.04% of its assets invested in Wells Fargo & Co (WFC).
Invesco Comstock Y (ACSDX) seeks return through appreciation of income and capital. ACSDX invests a bulk of its assets in common stocks of companies with different market-caps with special focus on large-cap companies. The fund may also invest around one-tenth of its assets in REITs.Invesco Comstock Y returned 38.5% in the last one-year period.
ACSDX has an expense ratio of 0.59% as compared to the category average of 1.10%.