Featured Tickers:

BIGRX ,

CAMOX ,

DHLAX ,

FDGFX ,

FVDFX , GFVIX

HCMAX ,

HOVLX ,

LEXCX ,

NOLVX ,

NPRTX ,

PRFDX ,

TLVIX ,

TRVLX ,

This month’s Mutual Fund First Cut seeks out domestic large-cap value stock funds that have performed well within their peer group over the last five years. Domestic large-cap stocks are a core asset allocation segment for most investors. Value approaches have performed strongly recently, after being out of favor for a number of years.

There are over 1,103 domestic large-cap value stock funds in the AAII mutual fund universe. The screen first focused on consistent strong relative performance by requiring one-, three- and five-year performance grades of C or better. Performance grades are calculated by comparing a fund’s performance relative to other funds in the same category. An A grade is achieved by having performance among the top 20% of all funds in the category. These filters excluded funds in the lowest 40th percentile ranking (category grade of D or F). It is generally best to first identify a fund category desired for your asset allocation, then seek out funds with strong relative performance, acceptable risk and low expenses within the desired category.

To help eliminate funds where excessive risk is used to achieve their performance, we then excluded funds with a risk rank of F. The table below lists the fund category risk index, which relates a fund’s volatility over the last three years to the average volatility of funds in the same category. Funds with a category risk index of 1.00 had average volatility within the category.

To help take costs into account, we required that the fund’s expense ratio have a grade of C or better (lowest ratios) and we also excluded funds that charge a sales load. Mutual funds designated as institutional were excluded, as were funds with special share classes or designated as leveraged or inverse. Finally, only funds with a minimum initial investment of $50,000 or less made the First Cut. In total, 18 funds passed all of the filters, and they are ranked by their five-year return.

Large-Cap Value Funds With Consistent Strong Performance
(Ranked by Five-Year Return)

Fund	Ticker	1-Yr Ann’l Ret (%)	1-Yr Ret Cat Grade	3-Yr Ann’l Ret (%)	3-Yr Ret Cat Grade	5-Yr Ann’l Ret (%)	5-Yr Ret Cat Grade	Cate- gory Risk Index	Exp Ratio (%)	Port Turn- Over (%)	Closed	Min Initial Purchase ($)
Neuberger Berman Lg Cap Val Inv	NPRTX	85.3	A	19.9	A	18.5	A	1.07	0.85	157	X	1,000
Hillman Value No Load	HCMAX	60.3	B	17.2	A	15.6	A	1.05	0.95	30		5,000
Vanguard Windsor II Admiral	VWNAX	69.2	A	15.8	A	14.8	A	1.00	0.26	61		50,000
Vanguard Windsor II Inv	VWNFX	69.1	A	15.7	A	14.7	A	1.00	0.34	61		3,000
Cambiar Opportunity Inv	CAMOX	64.6	B	15.3	A	14.5	A	0.96	0.84	87		2,500
Diamond Hill Large Cap Inv	DHLAX	64.3	B	14.1	A	14.1	A	1.04	0.96	33	X	2,500
Homestead Value	HOVLX	55.7	C	13.2	A	14.1	A	0.97	0.66	22		500
American Century Discp Cor Val I	BIGRX	57.0	C	13.1	A	13.8	A	0.91	0.67	100		2,500
Thrivent Large Cap Value S	TLVIX	64.9	B	11.6	B	13.2	A	1.05	0.54	19		2,000
T. Rowe Price Value	TRVLX	65.7	B	13.1	A	13.2	A	0.92	0.78	115		2,500
Goldman Sachs Focused Value Inv	GFVIX	57.3	C	13.4	A	13.1	A	0.95	0.79	102		0
Touchstone Value Y	TVLYX	68.1	A	12.9	A	12.8	B	1.06	0.84	57		2,500
VALIC Company II Large Cap Value	VACVX	64.7	B	10.7	C	12.5	B	1.06	0.89	82		0
T. Rowe Price Equity Income	PRFDX	60.4	B	10.5	C	12.2	B	1.03	0.64	24		2,500
Voya Corporate Leaders Trust B	LEXCX	56.8	C	11.3	B	11.9	B	1.07	0.59	3		1,000
Fidelity Value Discovery	FVDFX	62.8	B	11.6	B	11.5	C	0.94	0.66	70		0
Northern Large Cap Value	NOLVX	61.0	B	10.7	C	11.5	C	1.06	0.55	80		2,500
Fidelity Dividend Growth	FDGFX	56.7	C	10.6	C	11.5	C	1.05	0.49	69		0
Source: AAII/Morningstar. Data as of 3/31/2021. Go to https://www.aaii.com/funds/firstcuts for a list of mutual funds currently meeting this criteria.