Top 10 Best Large Cap Blend Domestic Stock Mutual Fund 2011

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Intro

Investing in large company should be part of core investment portfolio for most long term investors. Large company may be able to withstand economic crisis better than small company or medium size company. After the severe recession, most large companies have been able to survive the crisis with little to no issue at all. Several reasons are:

  • Large company has more earning power and can adjust according to the market’s demand.
  • It can reduce it size to run more lean operation by cutting cost such as labor or part
  • It has more bargaining power to negotiate on pricing to buy raw materials or goods. This effort may reduce the cost to produce products.
  • It can burn any extra cash as the buffer to prepare for future growth if the market’s condition suddenly turns
  • It has diversified markets such as domestic, international, emerging markets etc
  • It is very uncommon for large company to file for bankruptcy, though it is possible. Think about McDonald, Johnson & Johnson, and Coca-Cola (KO); do you think this big company will ever bankrupt?
  • I can acquire the small and medium growth companies to expand its own business


How to invest in large company?

Large company definition can be varied from one investor to another investor. In my term, large company should have a market capitalization (market cap) of 10 billion or more. Market capitalization or market cap is a measurement of size of a business or company enterprise equal to the company’s share price multiple by the number of company shares outstanding.

To invest in large company, there are many different ways:

  • Invest in individual stock such as McDonald’s (Ticker: MCD), Merck (Ticker: MRK), JP Morgan Chase (Ticker: JPM), Bank of America (Ticker: BAC) and more
  • Invest in Mutual Fund or Exchange Traded Funds (ETF) or Closed End Fund (CEF). I prefer this type of investment since it will provide diversification into various big companies.


Large Blend Stock Funds

One of the Morningstar categories of Domestic stock or equity fund is Large Blend funds. There are three ways to invest in large cap mutual funds such as large blend funds, large growth funds, and large value funds. Large Blend funds are part of US Domestic equity funds. Large-blend funds have portfolios that are comparatively representative of the overall stock market in growth rates, size, and price. This large blend funds usually invest in US big companies or large enterprises. The funds tend to invest across the spectrum of U.S. industries and owing to their broad exposure; the funds returns are often similar to those of the S&P 500 Index. I will provide the list of Top 10 best large blend mutual funds.

My list mainly consists of 3 or more star of Morningstar rating and big asset underlying the stock mutual funds. Usually, big asset means lot of confident by investor as well constitutional to invest in these funds. With 3 or more stars, the funds usually have performed very well under any market condition. These funds should perform better than its competition and its index benchmark. Most of these funds also have many holdings in various big companies in USA.

Note: You may need a brokerage account to buy these mutual funds such as Firstrade, Scottrade, Fidelity, Vanguard and more.


Best Large Blend Domestic Stock Mutual Funds

The Top 10 Best Large Blend Stock Mutual Funds are:

  1. Vanguard Total Stock Market Index
  2. Vanguard 500 Index
  3. American Funds Investment Company of America A
  4. American Funds Fundamental Investors A
  5. Fidelity Spartan 500 Index
  6. Davis NY Venture A
  7. Hartford Capital Appreciation A
  8. Fairholme
  9. T. Rowe Price Equity Index 500
  10. JHancock2 Lifestyle Growth A


Large Blend Info

(click column header to sort results)
No  
Mutual Funds Description  
Ticker  
Yield  
Expense ratio  
M* Rating  
Total Asset (Bil)  
Min. To Invest  
1
Vanguard Total Stock Mkt Idx
VTSMX
1.80%
0.18%
4
137
$3,000
2
Vanguard 500 Index
VFINX
1.95%
0.18%
3
94
$3,000
3
American Funds Invmt Co of Amer A
AIVSX
2.00%
0.66%
3
54
$250
4
American Funds Fundamental Investors A
ANCFX
1.39%
0.69%
4
42
$250
5
Fidelity Spartan 500 Index
FUSEX
1.76%
0.10%
3
37
$10,000
6
Davis NY Venture A
NYVTX
0.65%
0.89%
3
31
$1,000
7
Hartford Capital Appreciation A
ITHAX
0.00%
1.22%
3
19
$2,000
8
Fairholme
FAIRX
0.78%
1.00%
5
15
$10,000
9
T. Rowe Price Equity Index 500
PREIX
1.58%
0.35%
3
11
$2,500
10
JHancock2 Lifestyle Growth A
JALGX
1.97%
0.62%
4
10
$2,500
Vanguard Total Stock Market Index Fund Characteristic
Vanguard Total Stock Market Index Fund Characteristic

1. Vanguard Total Stock Market Index

On top of the list of this large blend class of fund is Vanguard Total Stock Market Index fund. Vanguard investment is very popular for cost conscious long term investors or traders. Vanguard founder, John Bogle, is well known for establishing index mutual fund. Vanguard Total Stock Market fund seeks to track the performance of its benchmark, MSCI US Broad Market Index. The fund will try to replicate the performance of overall stock market. The fund will hold 1,200 – 1,300 of stocks of its index. The fund is managed by Gerard C. O’Reilly since 1994. The expense ratio is only 0.18% per year. The fund has returned 12.76% over the past year and 1.62% over the past five years. There is no sales charge and no 12b1 fees for this index fund.

The top 5 sectors of fund as of January 2011 are Information Technology, Financials, Consumer Discretionary, Energy and Industrials. The top 10 big companies holding in this fund include Exxon Mobil Corp, Apple Inc, Microsoft Corp, General Electric Co, International Business Machines Corp (IBM), Chevron Corp, Procter & Gamble Co, AT&T Inc, Johnson & Johnson, and JP Morgan Chase & Co.

If you have a retirement account such as Traditional IRA, Roth IRA, and 401k account. You may try to find some other classes which may offer lower expense ratio per year. Other tickers of Vanguard Total Stock Market are: VITSX, VTSAX, and VTSSX. For instance, VITSX has only 0.06% expense ratio. The expense ratio of different classes of fund can range from 0.06% to 0.18%.


2. Vanguard 500 Index

Vanguard 500 Index is the second Vanguard fund in this list. The total asset of this Vanguard 500 index fund is more than 94 billion. Vanguard 500 Index fund objective is to track S&P 500 index (Standard & Poor’s 500) performance and return. The fund will invest primarily in large capitalization stocks (i.e. large company). The fund is managed by Michael H. Buek since 2005. The expense ratio is also very low with 0.18% per year. The fund has returned 9.82% over the past year and 0.71% over the past decade. There is no sales charge and no 12b1 fees for this index fund.

The top 6 sectors in this fund as of January 2011 are Information Technology, Financials, Energy, Industrials, Consumer Staples, and Consumer Discretionary. The top 10 big companies holding in this fund include Exxon Mobil Corp, Apple Inc, Microsoft Corp, General Electric Co, Chevron Corp, International Business Machines Corp (IBM), Procter & Gamble Co, AT&T Inc, Johnson & Johnson, and JPMorgan Chase & Co.

For better performance or lower fees, investor can invest in admiral shares or institutional shares which may be offered in retirement account such as traditional IRA, Roth IRA, 401k account and 529 educational accounts. For instance, VFIAX and VIFSX have only 0.07% expense ratio per year.


Investment Company of America Fund Holdings
Investment Company of America Fund Holdings

3. American Funds Investment Company of America A

The Investment Company of America fund’s investment objective is to achieve long-term growth of capital and income. It invests in common stocks, convertible stocks, and investment grade bonds. It may invest small part of its asset (<15%) in foreign companies outside USA. The fund lead manager is R. Michael Shanahan since 1991. The expense ratio is 0.66% per year. The fund has returned 0.22% over the past year and 0.21% over the past 5 years based on load adjusted return. As typical Class A fund, there is a Front End Sales Load of 5.75% and a 12b1 fee of 0.23% for this actively managed fund. The fund has been lagging its competitor for this past year.

As January 2011, the top 5 largest industry holdings include Oil, gas & consumable fuels, Beverages & Tobacco, Software, Diversified Telecommunication services, Semiconductor & semiconductor equipment, and Pharmaceuticals. The top 10 largest equity holdings are AT&T, Microsoft, Philip Morris International, Oracle, Merck, Royal Dutch Shell, Google, Intel, and Hewlett Packard (HP).

This American fund has many different classes. Some classes may be offered with no front end sales charge and no 12b1 fees. This type of account maybe found in various retirement accounts such as IRA or 401k. For instance, RICGX has only 0.33% expense ratio and no front end sales load. The expense ratio of different classes of fund can range from 0.33% to 1.53%.


4. American Funds Fundamental Investors A

American Funds Fundamental Investors fund is part of growth and income fund offered by American Fund. American Funds Fundamental Investors fund’s objective is to seek long term growth of capital and income. The fund invests primarily in common stocks of undervalue big companies that offer superior opportunities for capital growth and consistently paying dividends. It may invest small part of its asset (<35%) in foreign companies outside USA. The fund lead manager is James E. Drasdo since 1984. The expense ratio is 0.69% per year. The fund has returned 2.64% over the past year and 2.21% over the past 5 years based on load adjusted return. As typical Class A fund, there is a Front End Sales Load of 5.75% and a 12b1 fee of 0.23% for this actively managed fund.

This fund is classified as large blend fund per Morningstar class. The top 5 largest industry holdings include Oil, gas & consumable fuels, Pharmaceuticals, Chemicals, Commercial banks, and Semiconductor & semiconductor equipment. The top 10 largest equity holdings are Merck, Home Depot, Suncor, Microsoft, Verizon, Bristol Myers Squibb, McDonald’s, Apple, JPMorgan Chase and Syngenta.

As an investor, you may also find various different classes of Fundamental Investors fund which may offer better expense ratio, no sales charge and no 12b1 fees. The Fundamental Investors R6 shares (Ticker: RFNGX) only has 0.35% expense ratio per year and there is no front end sales charge and no 12b1 charge.


Fidelity Spartan 500 Index Fund Holding
Fidelity Spartan 500 Index Fund Holding

5. Fidelity Spartan 500 Index

Fidelity Spartan 500 Index fund is a passively managed index fund offered by Fidelity Investment. The Fidelity Spartan 500 Index fund objective is to provide investment results that replicate to the total return performance of US S&P 500 index. The fund usually invests at most of its assets (>80%) in common stocks included in the Standard & Poor's 500 index. This index usually is used to broadly represent the performance of common stocks publicly traded in the USA. The fund lead manager is Jeffrey Adamssince 2005. There is no sales load for this index mutual fund. The fund has returned 9.89% over the past year and -5.18% over the past 3 years.

This fund is also offered in most Retirement IRA, 401K fund, and 529 account selection. The other class tickers are FUSVX. This FUSVXfund is part of advantage class fund. It has lower expense ratio of 0.07%.

The primary portfolio consists of large cap blend domestic stocks. The top 5 major market sectors of fund as of January 2011 are Information Technology, Financials, Energy, Industrials, and Health Care sector. Top 10 largest equity holdings contribute to 18.47% asset for this fund are Exxon Mobil Corp, Apple Inc, Microsoft Inc, General Electric Co, Chevron Corp, International Business Machine Corp (IBM), Procter & Gamble Co, AT&T Inc, Johnson & Johnson, and JPMorgan Chase & Co.


6. Davis NY Venture A

Davis NY Venture A fund seeks long-term growth of capital. The fund invests most of its assets in equity securities issued by large companies with market capitalizations of at least $10 billion. The fund lead manager is Christopher Cullom Davis since 1995. The expense ratio is 0.89% per year. The fund has returned 2.70% over the past year and 2.11% over the past 10 years based on load adjusted return. Since this is a Class A fund, there is a Front End Sales Load of 4.75% and a 12b1 fee of 0.24% for this actively managed fund. If you can in invest in the Y class of this fund (Davis NY Venture Y - DNVYX), this fund only charges 0.63 expense ratio and there is no other fees (sales fee and 12b1 fee). You can invest this other classes either through brokerage account for your retirement investment account.

As of October 2010, the top 5 major market industries of fund are Energy, Diversified Financials, Pharmaceutical & Health Care, Insurance, and Materials sector. Top 10 largest equity holdings for this fund are American Express, Costco Wholesale, Berkshire Hathaway Class A, Wells Fargo & Co, Bank of New York Mellon, EOG Resources, CVS Caremark, Occidental Petroleum, Loews, and Devon Energy.


7. Hartford Capital Appreciation

Hartford Capital Appreciation fund seeks growth of capital. The fund usually invests most of total assets (>65%) in common stocks of small, medium and large companies. It also invests some of its asset in foreign stocks including emerging market stocks. The fund lead manager is Saul J. Pannell since 1996. The expense ratio is 1.22% per year. The fund has returned -8.52% over the past 3 years and 1.13% over the past 5 years based on load adjusted return. Since this is a Class A fund, there is a Front End Sales Load of 5.50% and a 12b1 fee of 0.25%. You can check the class Y (Hartford Capital Appreciation Y – HCAYX) of this fund for lower fees. The expense ratio of this HCAYX is only 0.72% per year.

As of October 2010, the top 5 major market industries of fund are Information Technology, Financials, Health, Consumer Discretionary, and Industrials. Top 10 largest equity holdings for this fund are Ford Motor Co, ACE Ltd, Kraft Foods Inc, Wells Fargo & Co, Goldman Sachs Group Inc, General Electric Co, Oracle Corp, Pfizer Inc, Dow Chemical and JPMorgan Chase & Company.


Fairholme Holding
Fairholme Holding | Source

8. Fairholme

Fairholme mutual fund has outperformed other competitor funds consistently. This is also the only fund which has 5 stars rating from Morningstar. The fund is managed by Bruce Berkowitz since 1999. Berkowitz is one of the well known fund manager in investment industry. The Fairholme fund seeks long-term growth of capital. The fund primarily invests a focused portfolio of equity and fixed-income securities. It may invest in various assets classes and market sectors. The fixed-income securities in which the fund invests include corporate bonds, domestic bonds, government bonds, foreign bond and more. Typically this Fairholme fund is classified into Large Blend class; recently the holding has focused into large value class. The expense ratio is 1.00% per year. The fund has returned 19.37% over the past year and 8.17% over the past five years. There is no sales charge and no 12b1 fees for this active fund. The main motto of the Fairholme Investment is “Ignore the crowd.”

The top 6 major sectors of fund as of September 2010 are Real Estate Investment Trusts, Diversified Banks, Capital Markets, Multi-Line Insurance and Diversified holding companies. The top 10 big companies holding in this fund include General Growth Properties / The Rouse Co., American International Group Inc, Sears Holdings Corp, Berkshire Hathaway Inc, The Goldman Sachs Group Inc, Citigroup Inc, Bank of America Corp, Morgan Stanley, AmeriCredit Corp, and The St. Joe Company.


9. T. Rowe Price Equity Index 500

Like its name, T. Rowe Price Equity Index 500 fund seeks to match the performance of the S&P 500 Index. The fund is managed by E. Frederick Bair since 2002. The expense ratio is 0.35% per year. The fund has returned 9.65% over the past year and 0.75% over the past five years. There is no sales charge and no 12b1 fees for this active fund. To invest in this T. Rowe Price Equity Index 500 fund, investor needs to have $2,500 minimum initial balance to fund.

As of January 2011, the top 5 major sectors of fund are Information Technology, Financials, Energy, Industrials & Business Services, and Health Care. The top 10 big companies holding in this fund include AT&T, Apple, Chevron, Exxon Mobil, General Electric, International Business Machines (IBM), JPMorgan Chase, Johnson & Johnson, Microsoft and Procter & Gamble.


Lifestyle Growth Fund Holding
Lifestyle Growth Fund Holding

10. JHancock2 Lifestyle Growth A

JHancock2 Lifestyle Growth fund seeks long-term capital growth and provides current income. This fund is part of John Hancock fund family. This fund consists of various funds from different fund family. The fund usually invests majority of its assets (<80%) in equity securities and approximately 20% of assets in fixed-income securities or bonds. The fund is managed by Bruce Speca since 2010. The expense ratio is 0.62% per year. The fund has returned 5.83% over the past year and 1.45% over the past five years. There is also a front end sales charge of 5.00% and a 0.30% of 12b1 fees for this active fund. To invest in this JHancock2 Lifestyle Growth fund, investor needs to have $2,500 minimum initial balance to fund.

If you have a retirement account such as IRA or 401k, you may be able to find other classes for this fund which may offer lower fees. For instance, JHancock2 Lifestyle Growth R5 (Ticker: JTLGX), has only 0.26% expense ratio and there is no other fees.

As of October 2010, the top 4 fund allocation is as follows: Growth (34%), Aggressive Growth (24.50%), Growth & Income (22.50%), and Income (19.00%). The top 10 fund holdings are DFA Emerging markets Value, GMO International Core, Marsico International Opportunities, Franklin Templeton International Value, Wellington Natural Resource Equities, Wellington Mid Cap Stock, American Century Heritage, SSgA International Equity Index, Franklin Templeton International Small Cap, GMO International Growth Stock and DFA International Small Company.


Disclosure

I have no affiliation with any of these mutual funds. I do have position in Vanguard S&P 500 index fund in my 401k account. I may buy and sell at any time. Please do your own research for additional details. Please trade and invest responsibly. Past Performance is No Guarantee of Future Results.


Best Large Blend Fund Performance

(click column header to sort results)
No  
Mutual Funds Description  
Ticker  
1 Yr  
3 Yr  
5 Yr  
10 Yr  
1
Vanguard Total Stock Mkt Idx
VTSMX
12.76%
-4.06%
1.62%
1.96%
2
Vanguard 500 Index
VFINX
9.82%
-5.19%
0.90%
0.71%
3
American Funds Invmt Co of Amer
AIVSX
0.22%
-6.95%
0.21%
2.30%
4
American Funds Fundamental Investors A
ANCFX
2.64%
-6.79%
2.21%
3.47%
5
Fidelity Spartan 500 Index
FUSEX
9.89%
-5.18%
0.94%
0.72%
6
Davis NY Venture A
NYVTX
2.70%
-7.75%
-0.76%
2.11%
7
Hartford Capital Appreciation A
ITHAX
2.75%
-8.52%
1.13%
4.45%
8
Fairholme
FAIRX
19.37%
3.84%
8.17%
11.46%
9
T. Rowe Price Equity Index 500
PREIX
9.65%
-5.31%
0.75%
0.56%
10
JHancock2 Lifestyle Growth A
JALGX
5.83%
-4.52%
1.45%
N/A
Updated on 1/1/2011

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Comments 2 comments

LillyGrillzit profile image

LillyGrillzit 5 years ago from The River Valley, Arkansas

Excellent Hub! You offer the most unique and good financial information and format. Digg'd and tweeted.


chan0512 profile image

chan0512 5 years ago from Camarillo, CA Author

Thanks Lilly!

Glad you like this article. More to come of course. I'll complete the large cap mutual fund such as Large blend, large growth and large value.

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