3 Mid-Cap Value Mutual Funds to Add to Your Portfolio

The Federal Reserve boosted investor sentiment with half-a-percentage-point cut last month. The borrowing cost is now in the range of 4.75-5.00% after the markets witnessed a 525-basis-point hike by the central bank in 2022 and 2023 to crush high inflation. Market participants are expecting a further 25-basis-point reduction in interest rate in upcoming November FOMC meeting. Such moves will ease the interest rate burden on American businesses and increase profitability.The Fed’s hawkish stance has successfully brought down inflation close to its 2% target without derailing the economy. Interest-rate easing, decline in inflation numbers, and a resilient labor market have eased fears of a weakening economy, and created a favorable investment environment for investors. However, the U.S. presidential election, economic growth and inflation in the coming months amid rising geo-political turmoil in the Middle East between Iran and Israel remain the key concerns for investors.Thus, investors who seek higher returns than large-cap funds but less volatility than the small-cap ones can opt for mid-cap mutual funds like T. Rowe Price Mid-Cap Value TRMCX, MFS Mid Cap Value MVCKX and Fidelity Value FVLKX as their major holdingsto achieve their investment objective.These funds have the majority of their investments in sectors such as technology, finance, consumer durables and industrial cyclical, which will help investors in long-term growth and preservation of wealth.Why Invest in Mid-Cap Value Mutual Funds?Mid-cap value mutual funds provide excellent opportunities for investors seeking returns with lesser risk by gaining exposure to stocks that are available at a discounted price. While large companies are normally known for stability and the smaller ones for growth, mid-caps offer growth and stability simultaneously. Companies with market capitalization between $2 billion and $10 billion are generally considered mid cap.Value mutual funds are those that invest in stocks trading at discounts to book value and have a low price-to-earnings ratio along with high dividend yields. Value investing is always a coveted strategy, and for a good reason. After all, who doesn’t want to add stocks that have low PEs, a solid outlook and decent dividends? However, not all value funds solely comprise companies that primarily use their earnings to pay out dividends. Investors interested in choosing value funds for yield, should surely check the mutual fund yield.We have thus selected three mid-cap value mutual funds that boast a Zacks Mutual Fund Rank #1 (Strong Buy), have positive three-year and five-year annualized returns and minimum initial investments within $5000, and carry an expense ratio of less than 1%. 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).T. Rowe Price Mid-Cap Value fund invests most of its assets along with borrowings, if any, in equity securities of companies with market capitalization within the range of the companies listed on either the S&P MidCap 400 Index or the Russell Midcap Value Index at the time of purchase.Vincent Michael DeAugustino has been the lead manager of TRMCX since May 1, 2022. Most of the fund’s exposure is in companies like Corning (2.7%), Western Digital (2.4%) and MKS Instruments (2.4%) as of June 30, 2024.TRMCX has three-year and five-year annualized returns of 12.4% and 14.4%, respectively. The annual expense ratio of TRMCX is 0.79%.To see how this fund performed compared to its category, and other 1 and 2 Ranked Mutual Funds, please click here.MFS Mid Cap Value fund invests most of its net assets in equity securities of mid-cap companies. MVCKX advisors consider mid-cap companies as those with market capitalization within the range of companies listed on the Russell Midcap Index over the last 13 months at the time of purchase.Brooks A. Taylor has been the lead manager of MVCKX since Nov. 20, 2008. Most of the fund’s investments are in companies like Hartford Financial (1.6%), PG&E Corporation (1.3%) and Diamondback Energy (1.3%) as of June 30, 2024.MVCKX has three-year and five-year annualized returns of 9.9% and 12.0%, respectively. MVCKX has an annual expense ratio of 0.62%. Fidelity Value fund invests in common stocks of medium-sized companies that possess fixed assets or are undervalued with respect to factors such as assets, earnings or growth potential based on the research of Fidelity Management & Research Company LLC (FMR). FVLKX advisors preferably invest in medium-sized companies of domestic or foreign issues.Matthew Friedman has been the lead manager of FVLKX since May 13, 2010, and most of the fund’s investments are in companies like Constellation Energy (1.6%), Antero Resources (1.1%) and PG&E (1%) as of April 30, 2024.FVLKX has three-year and five-year annualized returns of 9.9% and 14.8%, respectively. FVLKX has an annual expense ratio of 0.76%.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 >>7 Best Stocks for the Next 30 DaysJust released: Experts distill 7 elite stocks from the current list of 220 Zacks Rank #1 Strong Buys. They deem these tickers "Most Likely for Early Price Pops."Since 1988, the full list has beaten the market more than 2X over with an average gain of +23.7% per year. So be sure to give these hand picked 7 your immediate attention. See them now >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Get Your Free (TRMCX): Fund Analysis Report Get Your Free (FVLKX): Fund Analysis Report Get Your Free (MVCKX): Fund Analysis ReportTo read this article on Zacks.com click here.Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks