Large-cap funds are considered prudent choices for risk-averse investors when compared to their small and mid-cap counterparts. These funds have exposure to large-cap stocks, with a long-term performance history and offer more stability than mid or small caps. Companies with market capitalization of more than $10 billion are generally considered large cap. However, due to their significant international exposure, large-cap companies might be affected by a global downturn.
Investors looking for a bargain, i.e., stocks trading at a discount, are mostly interested in value funds, which pick stocks that tend to trade at a price lower than their fundamentals (i.e. earnings, book value, debt equity) and pay out dividends. In the long run, value stocks are expected to outperform the growth ones across all asset classes and are less vulnerable to trending markets. However, investors interested in value funds for yield should check the mutual fund yield as not all value funds comprise companies that primarily use their earnings to pay out dividends.
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 its peers in the future. Investors can click here to see the complete list of large-cap value funds.
American Century NT Large Company Value Fund G Class (ACLLX – Free Report) aims for long-term growth of capital. The fund invests the majority of its assets in securities of large-capitalization companies. Under usual market conditions, the fund will invest about 80% of its assets in equity securities of companies that make up the Russell 1000 Index. ACLLX has returned 3.7% over the past three years.
Brian Woglom is one of the fund managers of ACLLX since 2016.
MFS Value Fund Class A (MEIAX – Free Report) aims for capital growth. The fund invests the majority of its assets in equity securities. The product mostly invests in those companies that Its advisors feel are undervalued. The fund primarily invests in common stocks and other equity securities of companies. MEIAX has returned 4.1% over the past three years.
MEIAXhas an expense ratio of 0.82% compared with the category average of 0.99%.
American Funds American Mutual Fund Class A (AMRMX – Free Report) aims for current income, capital growth and capital preservation. The fund primarily invests the majority of its assets in common stocks of U.S. companies that have prospects of good growth and offer sustainable dividends. AMRMX has returned 6.7% over the past three years.
As of March 2020, AMRMX held 171 issues, with 4.02% of its assets invested in Microsoft Corp.
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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