JRB U.S. Large-Cap Funds

The JRB offers plan participants five large-cap funds from which to choose. Collectively, JRB plan participants have 35% of their retirement savings invested in these large-cap funds, more than in any other sector. That’s both understandable and reasonable. These are the companies with which we are most familiar – Microsoft, Apple, Berkshire Hathaway, Bristol-Myers Squibb, Proctor & Gamble, etc. Indeed, large-cap U.S. stocks make up about 40% of total worldwide market capitalization.

Market capitalization measures the total value of a company in dollars. Large-cap companies generally exceed $10 billion in market capitalization. The largest large-cap companies, often called mega-caps, have market capitalizations above $200 billion.

 

What Role Do Large-Cap Funds Play in Your Portfolio?

Large-cap stocks play an important role in most investment portfolios. While stock values rise and fall more than bonds and cash investments, large-cap stocks generally tend to be less volatile than the stocks of smaller companies and international companies. This means that large-cap stocks have the potential to provide a higher return than bonds with less of the risk associated with investments in small-cap, mid-cap and non-U.S. stocks. This combination of risk and return is the reason large-cap stocks are generally the largest component of the equity portion of your portfolio.

How Do U.S. Large-Cap Funds Differ?

Large-cap funds differ by their investment style and their management approach.

The JRB differentiates our large-cap investment options by three types of investment styles.

  • A mutual fund that takes a growth approach focuses on capital appreciation – an increase in the value of a company’s stock price. Growth companies are those whose revenues and earnings increase faster than the average business in their industry. Growth stocks often sell at a premium and growth companies tend to reinvest earnings rather than offer dividends.
  • A mutual fund that takes a value approach invests in companies that appear underpriced by the marketplace. These companies typically are more mature, have stable revenues and earnings and generally pay dividends.
  • A mutual fund that takes a blend approach invests in both growth and value stocks.

Funds offered by the JRB use two different management strategies.

  • Passively managed mutual funds mirror an index, such as the S&P 500 Index, and seek to generate returns that replicate the performance of the index.
  • Actively managed fund managers use research and analysis to buy and sell securities, seeking to achieve returns that surpass the index against which the funds are benchmarked.

Five Large-Cap Fund Offerings

Fidelity® 500 Index Fund (FXAIX)

The Fidelity® 500 Index Fund is a passively managed fund that seeks to mirror the total returns (capital appreciation and dividend income) of common stocks publicly traded in the U.S. It normally invests at least 80% of the Fund’s assets in companies included in the S&P 500 Index. The Fund is considered a large-cap blend fund.

The Fund uses the S&P 500 as its benchmark.

MORNINGSTAR® RATINGS (as of 12/31/2020)

OVERALL RATING1: (compared to other funds in the Morningstar® large-cap/blend category) ★★★★

RETURNS2 (compared to other funds in the Morningstar® large-cap/blend category)

 

 

 

 

 

Low

 

Average

 

High

EXPENSES3 (compared to other funds in the Morningstar® large-cap/blend category)

 

 

 

 

 

Low

 

Average

 

High

RISK4 (compared to other funds in the Morningstar® large-cap/blend category)

 

 

 

 

 

Low

 

Average

 

High

Total Returns (as of 12/31/2020)

1-Year Return

3-Year Returns

5-Year Returns

10-Year Returns

+18.40%

+14.17%

+15.21%

+13.87%

 

Fidelity® 500 Index Fund Fact Sheet

Fidelity® 500 Index Fund Prospectus

 

JPMorgan Equity Income (HLIEX)

The JPMorgan Equity Income Fund, an actively managed large-cap value fund, invests in large, high-quality U.S. companies with healthy and sustainable dividends. It also seeks to provide lower volatility and stock market growth. The Fund invests 80% of its net assets in stocks of companies that regularly pay dividends. Capital appreciation is a secondary goal.

The Fund uses the Russell 1000 Value Index as a benchmark.

MORNINGSTAR® RATINGS (as of 12/31/2020)

OVERALL RATING1: (compared to other funds in the Morningstar® large-cap/blend category) ★★★★★

RETURNS2 (compared to other funds in the Morningstar® large-cap/blend category)

 

 

 

 

 

Low

 

Average

 

High

EXPENSES3 (compared to other funds in the Morningstar® large-cap/blend category)

 

 

 

 

 

Low

 

Average

 

High

RISK4 (compared to other funds in the Morningstar® large-cap/blend category)

 

 

 

 

 

Low

 

Average

 

High

Total Returns (as of 12/31/2020)

1-Year Return

3-Year Returns

5-Year Returns

10-Year Returns

+3.62%

+7.73%

+11.03%

+11.66%

 

JPMorgan Equity Income Fund Fact Sheet

JPMorgan Equity Income Fund Prospectus

 

Fidelity® Contrafund® (FCNTX)

The Fidelity® Contrafund® is an actively managed, growth oriented fund that focuses on capital appreciation. Currently, more than 90% of the Fund’s holdings are in U.S. stocks. The fund management team looks for companies whose earnings potential has increased or is expected to increase.

The benchmark for the Fidelity® Contrafund® is the S&P 500.

MORNINGSTAR® RATINGS (as of 12/31/2020)

OVERALL RATING1: (compared to other funds in the Morningstar® large-cap/blend category) ★★★

RETURNS2 (compared to other funds in the Morningstar® large-cap/blend category)

 

 

 

 

 

Low

 

Average

 

High

EXPENSES3 (compared to other funds in the Morningstar® large-cap/blend category)

 

 

 

 

 

Low

 

Average

 

High

RISK4 (compared to other funds in the Morningstar® large-cap/blend category)

 

 

 

 

 

Low

 

Average

 

High

Fund Performance – Total Return (as of 12/31/2020)

1-Year Return

3-Year Returns

5-Year Returns

10-Year Returns

+32.50%

+19.01%

+18.16%

+15.39%

 

Fidelity® Contrafund® Monthly Fact Sheet

Fidelity® Contrafund® Prospectus

 

T. Rowe Price U.S. Equity Research (PRCOX)

The T. Rowe Price U.S. Equity Research fund is an actively managed fund that invests in a blend of value and growth stocks from the S&P 500. The Fund’s investments weigh each sector and industry approximately the same as the full range of S&P 500 companies. The Fund seeks to provide returns slightly greater than the S&P 500 with potential for long-term capital growth and some dividend income.

The benchmark for the T. Rowe Price U.S. Equity Research Fund is the S&P 500.

MORNINGSTAR® RATINGS (as of 12/31/2020)

OVERALL RATING1: (compared to other funds in the Morningstar® large-cap/blend category) ★★★★★

RETURNS2 (compared to other funds in the Morningstar® large-cap/blend category)

 

 

 

 

 

Low

 

Average

 

High

EXPENSES3 (compared to other funds in the Morningstar® large-cap/blend category)

 

 

 

 

 

Low

 

Average

 

High

RISK4 (compared to other funds in the Morningstar® large-cap/blend category)

 

 

 

 

 

Low

 

Average

 

High

Total Returns (as of 12/31/2020)

1-Year Return

3-Year Returns

5-Year Returns

10-Year Returns

+19.81%

+14.81%

+15.60%

+14.03%

 

T. Rowe Price U.S. Equity Research Fund Fact Sheet

T. Rowe Price U.S. Equity Research Fund Prospectus

 

Parnassus Core Equity Research (PRILX)

The Parnassus Core Equity Fund, an actively managed, large-cap, blend fund, specializes in socially responsible investments. Fund managers consider a company’s environmental, social and governance (ESG) record as well as traditional metrics that may impact a stock’s performance. The Fund does not invest in companies with significant revenue streams from tobacco, alcohol, weapons and gambling. Because of its socially responsible focus, the top holdings don’t attempt to duplicate the holdings of its benchmark, the S&P 500 Index. At least 75% of the Fund’s total assets will normally be invested in equities that pay dividends.

The S&P 500 Index is used as the benchmark for the Fund.

MORNINGSTAR® RATINGS (as of 12/31/2020)

OVERALL RATING1: (compared to other funds in the Morningstar® large-cap/blend category) ★★★★★

RETURNS2 (compared to other funds in the Morningstar® large-cap/blend category)

 

 

 

 

 

Low

 

Average

 

High

EXPENSES3 (compared to other funds in the Morningstar® large-cap/blend category)

 

 

 

 

 

Low

 

Average

 

High

RISK4 (compared to other funds in the Morningstar® large-cap/blend category)

 

 

 

 

 

Low

 

Average

 

High

Total Returns (as of 12/31/2020)

1-Year Return

3-Year Returns

5-Year Returns

10-Year Returns

+21.47%

+16.76%

+15.51%

+14.19%

 

Parnassus Core Equity Fact Sheet

Parnassus Core Equity Prospectus

Conclusion

It is appropriate for large-cap funds to make up a significant part of a long-term investor’s portfolio. It is also solid practice for a retirement investor to diversify their holdings within this important asset class. The JRB offers an excellent range of high-quality, large-cap investment options to meet your savings needs. Please contact us at 888-JRB-FREE (572-3733) or send us an email to discuss your asset allocation or any other investment question you have.

January 2021

1 The Morningstar Overall Rating™ for funds, or "star rating," is calculated for funds with at least a three-year history. The Morningstar Rating is calculated from a weighted average of its three-, five- and 10-year (if applicable) Morningstar Rating metrics. The top 10% of products in each product category receive 5 stars.

2 The Morningstar Return Rating is a measure of a fund's risk-adjusted return, relative to similar funds. Funds are rated from 1 to 5 green boxes, with the best performers receiving 5 green boxes and the worst performers receiving a single green box. The 10% of funds in each category with the highest risk-adjusted return receive 5 green boxes, the next 22.5% receive 4, the middle 35% receive 3, the next 22.5% receive 2, and the bottom 10% receive 1 green box.

3 The Morningstar® Expenses Rating compares each fund's net expense ratio to the net expense ratio of all of the other funds within its Morningstar® Category grouping. Funds are rated from 1 to 5 green boxes, with the best performers receiving 5 green boxes and the worst performers receiving a single green box. The 10% of funds in each category with the highest risk-adjusted return receive 5 green boxes, the next 22.5% receive 4, the middle 35% receive 3, the next 22.5% receive 2, and the bottom 10% receive 1 green box.

4 The Morningstar® Risk Rating is based on a fund's past performance compared to other funds in its Morningstar® category. It compares the fund's total return to the risk adjusted return (factoring market volatility into the risk assessment). In the risk rating process, 10% of a category's funds with the lowest measured risk are rated as low risk. The next 22.5% are rated below average, the middle 35% are average, the next 22.5% above average, while the top 10% are rated as high risk. Morningstar measures risk for as many as three periods (three, five, and 10 years). These separate measures are then weighted and averaged to produce an overall measure for the fund.