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 caps. 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 peers in the future. Investors can click here to see the complete list of large-cap value funds.
Putnam Equity Income Fund Class A (PEYAX – Free Report) aims for capital growth and current income. The fund invests in common stocks of midsize and large U.S. companies, with a focus on value stocks that offer the potential for capital growth, current income, or both. PEYAX has returned 12.7% over the past three years.
Darren A. Jaroch is one of the fund managers of PEYAX since 2012.
Westwood LargeCap Value Fund A Class (WWLAX – Free Report) aims for long-term capital appreciation. The fund primarily invests assets in common stocks and other equity securities of large-capitalization companies. WWLAX has returned 9.9% over the past three years.
WWLAX has an expense ratio of 0.90% compared with the category average of 0.94%.
Fidelity Value Discovery Fund (FVDFX – Free Report) aims for capital appreciation. The fund invests assets in common stocks of companies that the fund manager believes are undervalued in the marketplace in relation to factors such as assets, sales, earnings, growth potential, or cash flow, or in relation to securities of other companies in the same industry.
As of March 2021, FVDFX held 100 issues, with 3.98% of its assets invested in Berkshire Hathaway Inc Class B.
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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