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3 Large-Cap Funds to Buy on Declining Consumer Confidence
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Americans who regained their confidence in the economy’s future are once again concerned about mounting inflationary pressures and higher borrowing rates. The Conference Board said on Jun 25 that U.S. consumer confidence fell to 100.4 in June from a downwardly revised 101.3 in May.
However, it came in better than economists’ estimates of a decline to 100.
Consumers had regained some confidence in May after inflation showed signs of cooling in April.
The Present Situation Index, a gauge of consumers’ assessment of current business and labor market scenario, increased to 141.5 in June from 140.8 in May. However, the Expectations Index, a gauge of consumers’ short-term outlook for income, business, and labor market conditions, declined to 73 from 74.9 in May.
The expectations measure has remained below 80, the threshold typically indicating an impending recession, for five straight months now, indicating that consumers aren’t confident about the nation’s economy.
Year over year, the consumer price index (CPI) increased 3.4% in May, slightly below the consensus estimate of a rise of 3.4%, although it remained unchanged month over month after increasing 0.3% in April.
The Fed believes that although inflation has declined over the past year, it still needs to decline sharply for the central bank to start its rate cuts.
Federal Reserve Chairman Jerome Powell, in his June post-FOMC statement, hinted at just one 25 basis point rate cut this year, sharply lower than the three rate cuts projected in its March meeting. Higher interest rates for a longer period do not bode well for the broader economy.
Our Choices
We've identified three large-cap value mutual funds that have demonstrated impressive annualized returns over 3-year and 5-year periods. These funds also hold a Zacks Mutual Fund Rank of #1 (Strong Buy), require an initial investment of no more than $5,000 and have a low expense ratio.
The question here is: why should investors consider mutual funds? Reduced transaction costs and diversification of portfolio without several commission charges that are associated with stock purchases are primarily why one should be parking money in mutual funds (read more: Mutual Funds: Advantages, Disadvantages, and How They Make Investors Money).
Federated Hermes MDT Large Cap Value Svc (FSTKX - Free Report) fund's investment objective is to provide growth of income and capital. FSTKX pursues its investment objective by investing primarily in equity securities of companies that are generally leaders in their industries, are characterized by sound management and have the ability to finance expected growth.
FSTKX’s 3-year and 5-year annualized returns are 9.2% and 13.2%, respectively. Federated Hermes MDT Large Cap Value Svc fund has a Zacks Mutual Fund Rank #1 and an annual expense ratio of 0.20%.
To see how this fund performed compared to its category, and other 1 and 2 Ranked Mutual Funds, please click here.
Homestead Value (HOVLX - Free Report) fund seeks capital growth over the long term and, secondarily, income. Under ordinary conditions, HOVLX invests at least 80% of its total assets in common stocks of established companies.
HOVLX’s 3-year and 5-year annualized returns are 7.2% and 13.2%, respectively. Homestead Valuefund has a Zacks Mutual Fund Rank #1 and an annual expense ratio of 0.64%.
To see how this fund performed compared to its category, and other 1 and 2 Ranked Mutual Funds, please click here.
Invesco Comstock A (ACSTX - Free Report) fund seeks capital growth and income through investments in equity securities, including common stocks, preferred stocks and securities convertible into common and preferred stocks. ACSTX’s investment adviser generally seeks to identify companies that are undervalued and have identifiable factors that might lead to improved valuations. Invesco Comstock A fundinvests at least 80% of its net assets in common stocks at the time of investment.
ACSTX’s 3-year and 5-year annualized returns are 9.3% and 13.7%, respectively. Invesco Comstock Afund has a Zacks Mutual Fund Rank #1 and an annual expense ratio of 0.80%.
To see how this fund performed compared to its category, and other 1 and 2 Ranked Mutual Funds, please click here.
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3 Large-Cap Funds to Buy on Declining Consumer Confidence
Americans who regained their confidence in the economy’s future are once again concerned about mounting inflationary pressures and higher borrowing rates. The Conference Board said on Jun 25 that U.S. consumer confidence fell to 100.4 in June from a downwardly revised 101.3 in May.
However, it came in better than economists’ estimates of a decline to 100.
Consumers had regained some confidence in May after inflation showed signs of cooling in April.
The Present Situation Index, a gauge of consumers’ assessment of current business and labor market scenario, increased to 141.5 in June from 140.8 in May. However, the Expectations Index, a gauge of consumers’ short-term outlook for income, business, and labor market conditions, declined to 73 from 74.9 in May.
The expectations measure has remained below 80, the threshold typically indicating an impending recession, for five straight months now, indicating that consumers aren’t confident about the nation’s economy.
Year over year, the consumer price index (CPI) increased 3.4% in May, slightly below the consensus estimate of a rise of 3.4%, although it remained unchanged month over month after increasing 0.3% in April.
The Fed believes that although inflation has declined over the past year, it still needs to decline sharply for the central bank to start its rate cuts.
Federal Reserve Chairman Jerome Powell, in his June post-FOMC statement, hinted at just one 25 basis point rate cut this year, sharply lower than the three rate cuts projected in its March meeting. Higher interest rates for a longer period do not bode well for the broader economy.
Our Choices
We've identified three large-cap value mutual funds that have demonstrated impressive annualized returns over 3-year and 5-year periods. These funds also hold a Zacks Mutual Fund Rank of #1 (Strong Buy), require an initial investment of no more than $5,000 and have a low expense ratio.
The question here is: why should investors consider mutual funds? Reduced transaction costs and diversification of portfolio without several commission charges that are associated with stock purchases are primarily why one should be parking money in mutual funds (read more: Mutual Funds: Advantages, Disadvantages, and How They Make Investors Money).
Federated Hermes MDT Large Cap Value Svc (FSTKX - Free Report) fund's investment objective is to provide growth of income and capital. FSTKX pursues its investment objective by investing primarily in equity securities of companies that are generally leaders in their industries, are characterized by sound management and have the ability to finance expected growth.
FSTKX’s 3-year and 5-year annualized returns are 9.2% and 13.2%, respectively. Federated Hermes MDT Large Cap Value Svc fund has a Zacks Mutual Fund Rank #1 and an annual expense ratio of 0.20%.
To see how this fund performed compared to its category, and other 1 and 2 Ranked Mutual Funds, please click here.
Homestead Value (HOVLX - Free Report) fund seeks capital growth over the long term and, secondarily, income. Under ordinary conditions, HOVLX invests at least 80% of its total assets in common stocks of established companies.
HOVLX’s 3-year and 5-year annualized returns are 7.2% and 13.2%, respectively. Homestead Valuefund has a Zacks Mutual Fund Rank #1 and an annual expense ratio of 0.64%.
To see how this fund performed compared to its category, and other 1 and 2 Ranked Mutual Funds, please click here.
Invesco Comstock A (ACSTX - Free Report) fund seeks capital growth and income through investments in equity securities, including common stocks, preferred stocks and securities convertible into common and preferred stocks. ACSTX’s investment adviser generally seeks to identify companies that are undervalued and have identifiable factors that might lead to improved valuations. Invesco Comstock A fundinvests at least 80% of its net assets in common stocks at the time of investment.
ACSTX’s 3-year and 5-year annualized returns are 9.3% and 13.7%, respectively. Invesco Comstock Afund has a Zacks Mutual Fund Rank #1 and an annual expense ratio of 0.80%.
To see how this fund performed compared to its category, and other 1 and 2 Ranked Mutual Funds, please click here.
Want key mutual fund info delivered straight to your inbox?
Zacks' free Fund Newsletter will brief you on top news and analysis, as well as top-performing mutual funds, each week. Get it free >>