For quite a while, the U.S. stock market has been subject to bouts of volatility, with the major indexes slipping into a choppy trading session on Jun 9. The Cboe Volatility Index (VIX), in fact, registered its best one-day percentage jump yesterday since May 18.
Predominantly, growth-oriented stocks struggled to gain traction due to weaker investor risk appetite, thanks to concerns about elevated inflation and subsequently aggressive interest rate hikes in the near future. Meanwhile, global issues such as the ongoing Russia-Ukraine war and the COVID-19 crisis in China have raised further concerns about supply-chain disruptions and undoubtedly impacted the stock market.
Nevertheless, amid such torrid times, it is prudent for investors to take refuge in mutual funds having large-cap value companies as their major holdings.
Large-cap stocks are better choices than small or mid-cap stocks for risk-averse investors. Large-cap stocks have a long-term performance history and are more stable compared to mid or small caps. Companies with a market capitalization of more than $10 billion are generally considered large caps.
Moreover, since the broader market is primarily on a downslide, investors should look for stocks that tend to trade at a price lower than their fundamentals. Thus, investors should choose value stocks as they are expected to outperform growth ones once the market begins to recoup from the current downtrend.
We have thus selected three large-cap value mutual funds that boast a Zacks Mutual Fund Rank #1 (Strong Buy), have positive three-year and five-year annualized returns, minimum initial investments within $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).
JPMorgan Large Cap Value Fund Class R5 (JLVRX) invests most of its assets along with borrowings, if any, in securities of large-cap companies, including common stocks, debt and preferred stocks, which are convertible to common stocks. JLVRX invests in stocks with market capitalization similar to the one listed on the Russell 1000 Value Index at the time of investment.
Scott Blasdell has been the lead manager of JLVRX since Apr 4, 2013. Most of the fund’s exposure is in sectors such as Finance, Industrial Cyclical and Health as of 4/30/2022.
JLVRX’s three-year and five-year annualized returns are nearly 14.6% and 11.1%, respectively. JLVRXhas a Zacks Mutual Fund Rank #1 and an annual expense ratio of 0.54%, which is less than the category average of 0.94%.
To see how this fund performed compared in its category, and other 1 and 2 Ranked Mutual Funds, please click here.
BNY Mellon Dynamic Value Fund (DAGVX) invests most of its assets along with borrowings, if any, in common stocks of companies that have value, sound business fundamentals and positive business momentum evaluated on extensive quantitative and fundamental research by the portfolio manager. DAGVX also invests a small portion of its net assets in foreign equity securities with similar economic features.
Brian C. Ferguson has been the lead manager of DAGVX since Sep 30, 2003, and most of the fund’s exposure is in sectors such as Finance, Technology and Industrial Cyclical as of 4/30/2022.
DAGVX’s three-year and five-year annualized returns are 13.8% and 11.4%, respectively. DAGVX has a Zacks Mutual Fund Rank #1 and an annual expense ratio of 0.93%, which is less than the category average of 0.94%.
Vanguard Windsor II Fund Investor Share (VWNFX) seeks long-term capital appreciation along with current income by investing most of its net assets in common stocks of undervaluedlarge-cap companies. VWNFX advisors choose to invest in stocks trading at prices below average in relation to their earnings and book value, and having an above-average dividend yield.
George H. Davis has been the lead manager of VWNFX since Dec 11, 2003, and most of the fund’s exposure is in sectors such as Technology, Finance and Industrial Cyclical as of 4/30/2022.
VWNFX’s three-year and five-year annualized returns are 13.4% and 11.6%, respectively. VWNFX has a Zacks Mutual Fund Rank #1 and an annual expense ratio of 0.34% compared to the category average of 0.94%.
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