4 Mid-Cap Value Mutual Funds to Buy Despite Volatile Market Conditions
The U.S. economy remains resilient so far this year, balancing between moderate growth and cooling inflation. While recession fears have faded, high interest rates and renewed geopolitical tensions keep investors’ outlook cautious.
The economy continues to expand. The GDP growth rate for Q3 2025 came in at 4.4% compared to 3.8% in Q2. While growth is slower than in previous years, a healthy job market and rising wages have prevented a downturn. Inflation remained stable, as the Personal Consumption Expenditures index increased by 0.2% on a monthly basis through November, thanks to lower energy costs and better supply chains. But sticky costs in housing and healthcare keep inflation above the Federal Reserve’s 2% goal. Interest rates remain high. The Fed is taking a “wait-and-see” approach, signaling that rate cuts will only happen once inflation is fully under control. This has made borrowing more expensive for the average American.
The U.S. consumer confidence slumped 9.7 points to 84.5 in January, the lowest level since May 2014. Sluggish labor market conditions have forced households to be more cautious about spending. Analysts are also predicting significant cooling due to uncertainty over tariffs and trade policies raised by President Donald Trump. December’s Nonfarm Payrolls grew by 50,000, while the unemployment rate ticked down slightly to 4.4%. Meanwhile, wage growth accelerated, with average hourly earnings rising 3.8% year over year from November’s 3.6%. Overall, the U.S. economy is currently in a “soft landing” phase; its success depends heavily on how quickly inflation drops and how the Fed manages interest rates for the rest of the year.
Amid such market conditions, investors who seek higher returns than large-cap funds but less volatility than the small-cap ones can opt for mid-cap mutual funds, such as Tcw Relative Value Mid Cap Fund TGVOX, Vanguard Whitehall Funds, Selected Value Fund VASVX, Fidelity Value FDVLX and Dean Mid Cap Value DALCX as their major holdingsto achieve the investment objective.
These funds have the majority of their investments in sectors such as technology, finance, consumer durables and industrial cyclical, which will help investors with long-term growth and preservation of wealth.
Why Invest in Mid-Cap Value Mutual Funds?
Mid-cap value mutual funds provide excellent opportunities to seek returns with lesser risk by offering exposure to stocks that are available at a discounted price. While large companies are normally known for stability and the smaller ones for growth, mid-caps offer growth and stability simultaneously. Companies with market capitalization between $2 billion and $10 billion are generally considered mid-cap.
Value mutual funds are those that invest in stocks trading at discounts to their book value and have a low price-to-earnings ratio, along with high dividend yields. Value investing is always a coveted strategy, and for good reason. After all, who doesn’t want to add stocks that have low PEs, a solid outlook and decent dividends? However, not all value funds solely comprise companies that primarily use their earnings to pay out dividends. Investors interested in choosing value funds for yield should surely check the mutual fund yield.
We have thus selected four mid-cap value mutual funds that boast a Zacks Mutual Fund Rank #1 (Strong Buy), have positive three-year and five-year annualized returns and minimum initial investments of $5000, and carry a low expense ratio of less than 1%. Notably, mutual funds, in general, reduce transaction costs and diversify portfolios without an array of commission charges mostly associated with stock purchases (read more: Mutual Funds: Advantages, Disadvantages, and How They Make Investors Money).
Tcw Relative Value Mid Cap Fund invests most of its assets, along with borrowings, if any, in equity securities of mid-cap companies, which, according to its portfolio manager, are value companies. TGVOX advisors consider value companies as those that have fallen out of favor and whose stocks are selling below their real value.
Mona Eraiba has been the lead manager of TGVOX since April 3, 2020. Most of the fund’s investments were in companies like Popular (4.5%), Equitable Holdings (3.9%) and Jones Lang LaSalle (3.7%) as of July 31, 2025.
TGVOX has three-year and five-year annualized returns of 16.7% and 13.1%, respectively. TGVOX has an annual expense ratio of 0.85%.
To see how this fund performed compared to its category, and other 1 and 2 Ranked Mutual Funds, please click here.
Vanguard Whitehall Funds, Selected Value Fund invests most of its net assets in mid-cap domestic companies, which, according to the advisor, are undervalued. VASVX advisors consider a stock as undervalued if it is out of investors’ favor, trading at a price below average in relation to measures estimated, such as earnings and book value, and has an above-average dividend yield.
Richard L. Greenberg has been the lead manager of VASVX since Feb. 25, 2005. Most of the fund’s investments were in companies like Aercap Holdings (2.5%), Corebridge Financial (1.6%) and Gildan Activewear (1.5%) as of Oct. 31, 2025.
VASVX has three-year and five-year annualized returns of 14.2% and 12%, respectively. VASVX has an annual expense ratio of 0.36%.Â
Fidelity Value fund invests in common stocks of medium-sized companies that possess fixed assets or are undervalued with respect to factors such as assets, earnings or growth potential based on the research of Fidelity Management & Research Company LLC (FMR). FDVLX advisors preferably invest in medium-sized companies of domestic or foreign issues.
Matthew Friedman has been the lead manager of FDVLX since May 13, 2010. Most of the fund’s investments were in companies like Western Digital (1.5%), PG&E (1.2%) and Eversource Energy (1%) as of Oct. 30, 2025.
FDVLX has three-year and five-year annualized returns of 13.7% and 12.6%, respectively. FDVLX has an annual expense ratio of 0.68%.
Dean Mid Cap Value fund invests most of its net assets in equity securities of domestic medium-sized companies with market capitalizations similar to companies listed on the Russell MidCap Value Index at the time of investment. DALCX advisors also invest in securities convertible into common stocks, REITs, and master limited partnerships.
Douglas Allen Leach has been the lead manager of DALCX since June 30, 2008. Most of the fund’s investments were in companies like The Bank of New York Mellon (2.8%), L3Harris Technologies (2.3%) and Jazz Pharmaceuticals (2.3%) as of Sept. 30, 2025.
DALCX has three-year and five-year annualized returns of 12.9% and 12%, respectively. DALCX has an annual expense ratio of 0.85%.
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This article originally published on Zacks Investment Research (zacks.com).
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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