Five Funds: Large-Cap Value Offerings That Beat the Herd

In recent months, his bargain-hunting approach has led him to boost his stakes in companies such as General Electric(GE) and Verizon(VZ).

The fund's expense ratio is 0.8% and its yield is an above-average 1.8%.

5. Tie: (OAKMX)Oakmark and (EDTVX)Eaton Vance Tax-Managed Value

These funds are exceptions to the Five Funds rule that managers be at the helm for at least five years. But in both cases, the managers have long-term track records of excellence that make the exception a no-brainer.

Oakmark has been managed by Oakmark Select vet Bill Nygren and Kevin Grant since March 2000. The fund has racked up an impressive record before and after the new managers, with its three-year average annual return of 10.05% ranking good for the top 1% of all large-cap value funds. The 10-year return of 10.76% places the fund among the top 8% of its peers. Nygren doesn't mind scooping up some fallen growth companies, counting stocks like America Online among his 55 holdings. The fund also sports a below-average 1.15% expense ratio.

Over at Eaton Vance, Michael Mach manages the large-cap value funds, which include a "tax-managed" offering and an offering that caters to tax-deferred retirement accounts. Mach, at the helm since late 1999, has brought a strict discipline to his value funds, which has yielded great results.

Over the past three years, the fund's 3.13% average annual return places it in the top 5% of all large-cap value funds. Mach's purist approach to value investing leads him to companies such as Washington Mutual(WM). He's a skilled manager, but don't take my word for it -- check out this recent interview with him.

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