4 Mid-Value Funds to Round Out a Portfolio
In a growth-fueled market, investing in mid-value funds is a contrarian play.
Katie Reichart: Growth funds have been on fire in recent years as tech stocks have posted huge gains. Small-, mid-, and large-growth are among the best performing Morningstar equity fund categories not only in 2018, but also over the past five years.
On the flip side, value funds have turned in weaker returns. Mid-value funds in particular have gained just 2.8% for the year to date through July compared to double-digit gains for small- and large-growth funds.
Investing in a mid-value fund in this growth-fueled market is a bit of a contrarian play and could round out a portfolio. Some top mid-value funds rated highly by Morningstar, including T. Rowe Price Mid Cap Value and Diamond Hill Small-Mid Cap, are closed to new investors, but other notable, open choices remain.
Harbor Mid Cap Value is subadvised by LSV Asset Management, whose quantitative approach has a long, successful history. Hotchkis & Wiley Mid-Cap Value is a true-blue deep-value fund that isn’t for the faint of heart, but it's stuck to its approach and has reaped big rewards in up markets. Vanguard Selected Value relies on three subadvisors who ply complementary approaches at a reasonable price. Indexing fans may also consider Vanguard Mid-Cap Value Index, which has rock-bottom fees.
Katie Rushkewicz Reichart does not own (actual or beneficial) shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.