Sector Focus: Large Cap Value
Value funds have not had nearly the year so far that growth funds have, though with a gain of 7% large cap growth has been able to outpace both small and mid-cap value funds. Since many of the traditional defensive stocks fall in the large cap value category, the market volatility and the threat of recession has helped buoy this group.
With continued high oil prices, it’s not surprising that the oil majors in the group such as ExxonMobil, Chevron, and ConocoPhillips have bolstered the year-to-date performance of the large cap value funds. These stocks are up 23%, 30%, and 24%, respectively. Companies related to oil production such as Halliburton have also had a strong year so far.
Though technology names typically make less of a showing in value funds than growth funds, large cap value has seen some spillover from the strength in technology this year. Year to date IBM and AT&T are both up 22%, while Texas Instruments has gained 28%.
On the downside, large cap value funds do have significant exposure to the weakness that has hit the financial sector due to the housing and credit market problems. American International Group, JPMorgan, and Bank of America are all down single digits for the year, and Citigroup has lost 13%.
