Value stocks are stocks that tend to trade at a price that is lower than its fundamentals (i.e. earnings, book value, Debt-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. Meanwhile, mid-cap funds are ideal investment options for investors looking for high return potential that comes with lower risk than small-cap funds. Mid-cap funds are not very susceptible to volatility in broader markets, making it an ideal bet given that the macroeconomic conditions have generally offered a roller-coaster ride in recent years.
Below we will share with you 5 buy ranked mid-cap value mutual funds. Each has earned either a Zacks Mutual Fund Rank #1 (Strong Buy) or a Zacks Mutual Fund Rank #2 (Buy) as we expect these mutual funds to outperform their peers in the future. To view the Zacks Rank and past performance of all mid cap value funds, investors can click here to see the complete list of funds.
Goldman Sachs Mid Cap Value A (GCMAX) maintains a diversified portfolio by investing in equity securities of companies having market capitalizations similar to those included in the Russell Midcap Value Index. GCMAX primarily focuses on acquiring securities of domestic companies. However, GCMAX may also invest in securities of non-US firms including those located in emerging nations. The Goldman Sachs Mid Cap Value A fund has a three-year annualized return of 16.1%.
GCMAX has an expense ratio of 1.14% as compared to category average of 1.21%.
Sterling Capital Mid Value A (OVEAX) seeks capital appreciation over the long run. OVEAX invests a lion’s share of its assets in equity securities of undervalued mid cap companies. According to the advisors, a company with market capitalization within $1 billion to $30 billion is defined as a mid cap company. OVEAX predominantly invests in common stocks of both domestic and foreign firms that are traded in the US. The Sterling Capital Mid Value A fund has a three-year annualized return of 18.4%.
Timothy P. Beyer is the fund manager and has managed OVEAX since 1997.
Heartland Select Value (HRSVX) generally invests in common stocks of companies that are believed to be undervalued compared to their intrinsic value. HRSVX is expected to maintain a portfolio of 40 to 60 securities. HRSVX seeks to achieve capital growth over the long run. The Heartland Select Value fund has a three-year annualized return of 15%.
As of March 2015, HRSVX held 46 issues with 4.3% of its assets invested in Quest Diagnostics Inc.
Perkins Mid Cap Value D (JNMCX) seeks long-term capital growth. JNMCX invests a large chunk of its assets in ‘value’ stocks of companies having market capitalizations within the range of the Russell Midcap Value Index. JNMCX focuses on investing in common stocks of companies. JNMCX may also invest not more than one-fifth of its assets in companies other than mid cap firms. The Perkins Mid Cap Value D fund has a three-year annualized return of 12.3%.
JNMCX has an expense ratio of 0.65% as compared to category average of 1.21%.
Vanguard Capital Value Investor (VCVLX) invests in companies that are believed to be trading at a lower value when compared to their potential earnings, asset values and dividends. VCVLX may maintain a concentrated portfolio of stocks that may or may not pay dividend. The Vanguard Capital Value Investor fund has a three-year annualized return of 18.7%.
As of March 2015, VCVLX held 147 issues with 2.96% of its assets invested in Pioneer Natural Resources Co.
To view the Zacks Rank and past performance of all mid cap value mutual funds, investors can click here to see the complete list of funds.
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