Investors looking for exposure to both value and growth stocks, while seeking returns at a lower level of risk, may consider large-cap blend mutual funds. Large-cap funds offer more stability than mid or small caps and are thus safer. Generally, companies with a market capitalization of more than $10 billion are considered large caps. However, due to their significant international exposure, large-cap companies run the risk of being hit by global woes.
Blend funds, also called hybrid funds, owe their origin to the graphical representation of their equity-style box. In addition to diversification, blend funds offer a great mix of growth and value investment.
Below, we share with you three top-ranked large-cap blend mutual funds, namely Sterling Capital Equity Income Fund BAEIX, Fidelity Advisor Diversified Stock Fund FDESX and Vanguard Specialized Portfolios, Vanguard Dividend Growth Fund VDIGX. 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 funds.
Sterling Capital Equity Income Fund seeks capital growth along with current income by investing most of its assets in dividend-paying equity securities with a history of increasing dividend rates. BAEIX advisors may also invest in U.S.-traded common stocks of foreign companies, including American Depositary Receipts. The fund has returned 14.7% over the past three years.
As of September 2022, BAEIX held 36 issues and had 4.4% of its net assets invested in Starbucks.
Fidelity Advisor Diversified Stock Fund invests most of its net assets in common stocks of domestic and foreign companies considered growth stocks, value stocks, or both. FDESX advisors choose to invest in stocks based on fundamental analysis factors like industry position, as well as market and economic conditions. The fund has returned 13.2% over the past three years.
FDESX has an expense ratio of 0.45% compared with the category average of 0.99%.
Vanguard Specialized Portfolios, Vanguard Dividend Growth Fund invests primarily in stocks that tend to offer current dividends. VDIGX focuses on large-cap companies that have prospects for long-term total returns as a result of increased earnings and dividends over time. The fund has returned 12.3% over the past three years.
Donald J. Kilbride has been one of the fund managers of VDIGX since 2006.
To view the Zacks Rank and the past performance of all large-cap blend mutual funds, investors can click here to see the complete list of large-cap blend mutual funds.
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