Value stocks are stocks that tend to trade at a price that is lower than its fundamentals (i.e. earnings, book value, debt-to-equity). It is common for some investors to invest in value funds for the income or yield. However, not all value funds are comprised solely of companies that primarily use their earnings to pay dividends. Investors interested in choosing value funds for yield should be sure to check the mutual fund yield. The mutual fund yield is the dividend payments divided by the value of the mutual fund's shares. The value funds can be also divided into three segments depending on their market capitalizations. Value investing is always a very popular strategy, and for good reason. After all, who doesn't want to find stocks that have low P/Es, solid outlooks, and decent dividends?
Below we will share with you 5 top ranked all-cap value mutual funds. Each has earned a Zacks Mutual Fund Rank #1 (Strong Buy) as we expect these mutual funds to outperform their peers in the future. To view the Zacks Rank and past performance of all cap value funds, investors can click here to see the complete list of funds.
Fidelity Advisor Value A (FAVFX – MF report) primarily invests in mid-cap companies that Fidelity Management & Research Company considers to be undervalued based on factors like impressive earnings and asset growth prospects. FAVFX focuses on acquiring common stocks and may also invest in large and small-cap companies. FAVFX invests in companies across the world. The Fidelity Advisor Value A fund has a three-year annualized return of 12.6%.
As of July 2015, FAVFX held 293 issues with 1.52% of its assets invested in Sempra Energy.
DFA Tax-Managed US Marketwide Value II (DFMVX – MF report) seeks long-term growth of capital. DFMVX invests 100% of its assets in its Master Fund, the Tax-Managed U.S. Marketwide Value Series. The Master fund is expected to invest a major share of its assets in companies located in the US. The DFA Tax-Managed US Marketwide Value II fund has a three-year annualized return of 13.6%.
DFMVX has an expense ratio of 0.22% as compared to the category average of 1.10%.
American Century Capital Value A (ACCVX – MF report) generally invests in mid-to-large cap companies that are believed to be undervalued at the time of purchase. While selecting stocks, the portfolio managers choose companies whose value is not yet recognized by the market. To identify these companies, the portfolio managers look for companies with earnings, cash flows and/or assets that may not be reflected precisely in the companies' stock prices. The American Century Capital Value A fund has a three-year annualized return of 9.6%.
As of June 2015, ACCVX held 98 issues with 3.98% of its assets invested in JP Morgan Chase & Co.
Pioneer Value A (PIOTX – MF report) seeks long-term capital appreciation. PIOTX invests the majority of its assets in equity securities of US companies. PIOTX may invest a maximum of 10% of its assets in securities of non-US issuers, which include up to 5% of its assets in securities of emerging economies. PIOTX may also invest in initial public offerings of equity securities. The Pioneer Value A fund has a three-year annualized return of 9.5%.
PIOTX has an expense ratio of 0.99% as compared to the category average of 1.10%.
