5 Large-Cap Value Mutual Funds to Accumulate for Future Gains

Investors’ confidence in the United States remains fragile on account of various unpleasant macroeconomic factors and rising geopolitical tensions. The S&P 500, the DOW and the Nasdaq have come up with negative returns of 23.09%, 8.38%, and 32.15%, respectively, so far this year.

The consumer price index (CPI) for the month of September increased 8.2% on a year-over-year basis, mainly attributable to the rising prices of shelter, food and medical care. Though the inflation rate has marginally slipped from August’s high of 8.3%, the cost of living rose 0.4% for the month of September, beating street expectations.

The Federal Reserve has adopted an aggressively hawkish monetary policy to counter sky-high inflation and is expected to continue with its interest rate hike stance to bring down inflation, which is pinching hard the pockets of an average American. The fear of recession has already resurfaced.

Markets are facing a continuous downturn from the beginning of this year. Currently, the S&P 500 and the Dow are trading at a PE multiple of 17.85 and 18.88 times as compared to 30.49 and 23.38 times a year ego. Investors who wish to accumulate and gain from such corrected pricing can choose to invest large-cap, value mutual funds that provide excellent returns subject to low risk. 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.

Value stocks are expected to outperform across all asset classes when considered for a long-term period and are less susceptible to trending markets. Meanwhile, large-cap funds have exposure to large-cap stocks that are expected to provide 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 cap.

Mutual funds, in general, reduce transaction costs and diversify their portfolios without an array of commission charges that are mostly associated with stock purchases (read more: Mutual Funds: Advantages, Disadvantages, and How They Make Investors Money).

We have, thus, selected five large-cap value mutual funds that have given impressive 3-year and 5-year annualized returns, boast a Zacks Mutual Fund Rank #1 (Strong Buy), offer a minimum initial investment within $5,000 and carry a low expense ratio.

BNY Mellon Dynamic Value Fund DRGVX invests most of its assets along with borrowings, if any, in issues of domestic and foreign securities with a focus on individual stock selection i.e bottom-up approach. DRGVX fund managers use extensive quantitative and fundamental research to identify stocks that have value, sound business fundamentals and positive business momentum.

Brian Ferguson has been the lead manager of DRGVX since Sep 30, 2003, and most of the fund’s exposure is in companies such as Berkshire Hathaway (4.28%), Exxon Mobil (2.92%) and Wells Fargo (2.66%).

DRGVX has 3-year and 5-year annualized returns are 10.4% and 8.8%, respectively. The annual expense ratio of 0.68% is lower than the category average of 0.94%. DRGVX has a Zacks Mutual Fund Rank #1.

To see how this fund performed compared to its category, and other 1 and 2 Ranked Mutual Funds, please click here.

JPMorgan Large Cap Value Fund JLVRX invests most of its assets along with borrowings, if any, in equity securities of large-cap companies, including common stocks, debt and preferred stocks, which are convertible to common stocks. JLVRX advisors consider large companies that have market capitalizations similar to those listed on the Russell 1000 Value Index at the time of purchase.

Scott Blasdell has been the lead manager of JLVRX since Apr 4, 2013, and most of the fund’s exposure is in companies such as Bristol Myers Squibb (4.54%), Wells Fargo (3.35%) and Chevron (3.20%)

JLVRX has a 3-year and 5-year annualized returns are 10.1% and 7.2%, respectively. The annual expense ratio of 0.54% is lower than the category average of 0.94%. JLVRX has a Zacks Mutual Fund Rank #1.

Vanguard Windsor Fund VWNDX invests mostly in stocks of large and medium-capitalized companies that, according to its advisors, are undervalued. VWNDX chooses to invest in stocks that are out of favor with investors and trading at prices below average in relation to measures such as earnings and book value.

Richard S. Pzena has been the lead manager of VWNDX since Aug 2, 2012, and most of the fund’s exposure is in companies such as Westinghouse Air Brakes (2.08%), Cognizant (1.96%) and Metlife (1.95%).

VWNDX has 3-year and 5-year annualized returns are 9.1% and 7.2%, respectively. The annual expense ratio of 0.36% is lower than the category average of 0.94%. VWNDX has a Zacks Mutual Fund Rank #1.

Columbia Select Large Cap Value Fund SLVIX invests most of its assets along with borrowings, if any, in equity securities of large-capitalization issuers. SLVIX advisors consider large companies that have market capitalizations similar to those listed on the Russell 1000 Value Index at the time of purchase.

Richard S. Rosen has been the lead manager of SLVIX since Apr 2, 1997, and most of the fund’s exposure is in companies such as Verizon Communications (4.42%), FMC (3.97%) and Wells Fargo (3.55%).

SLVIX has 3-year and 5-year annualized returns are 8.8% and 7.0%, respectively. The annual expense ratio of 0.49% is lower than the category average of 0.94%. SLVIX has a Zacks Mutual Fund Rank #1.

Invesco Comstock Fund ACSDX seeks growth in capital along with current income by investing most of its assets, along with borrowings, if any, in common stocks, derivatives and other instruments with similar economic characteristics, mostly in large-capitalization issues. ACSDX also invests a small portion of its net assets in real estate investment trusts.

Devin E. Armstrong has been the lead manager of ACSDX since Dec 31, 2010, and most of the fund’s exposure is in companies such as Philip Morris International (3.11%), Elevance Health (2.82%) and Bank of America (2.59%).

ACSDX has a 3-year and 5-year annualized returns are 8.5% and 6.8%, respectively. The annual expense ratio of 0.55% is lower than the category average of 0.94%. ACSDX has a Zacks Mutual Fund Rank #1.

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