Daily Screen: Large-Cap Blend Funds

The category is called large-cap blend, but most of the top funds here are pretty growth-oriented.

First things first: Large-cap blend funds typically invest in stocks of large companies, blending growth and value stocks. Growth stocks are typically those of fast-growing companies that sell at a steep price relative to their earnings, such as networking dynamo Cisco Systems (CSCO). Value stocks are typically those of slower growers in mature industries like International Paper (IP). These companies often pay dividends, and fund managers buy them because they think they're undervalued. Growth investors essentially swing for the seats, while value investors are basically the bargain hunters of Wall Street.

As usual, we've screened for funds that beat the category's average return over the past one- and three-year periods, according to Morningstar. The top 10 are ranked by one-year return in the first table. The pack that make our list are among the category's more aggressive funds that have typically ridden high-octane growth stocks in the technology sector to higher returns than more conservative peers. On average, the these top-10 funds have about half their assets invested in tech and telecom stocks, according to their most recent portfolio reports.

The second table lists the 10 most popular stocks among the funds on the top-10 list. It was compiled by creating an equally weighted portfolio of the 10 funds and screening for their 10 biggest holdings. You'll notice these funds' tech bent is reflected in this collective top-10 list, which includes six tech stocks led by Cisco and data storage titan EMC (EMC).

Leading Large-Cap Blend Funds Among large-cap blend funds that beat their average peer over the past one- and three-year periods, these 10 have the highest one-year return.
Fund	1-Year Return	3-Year Annualized Return
(BURHX)Burnham	50.1%	26.2%
(MFCAX)MFS Core Growth	48.1	33.1
(UNACX)Waddell & Reed Accumulation	47.8	22.8
(PAPIX)PIMCO Capital Appreciation	47.2	21.0
(WHGFX)Whitehall Growth	46.0	31.4
(TAGRX)John Hancock Large Cap Value	45.0	20.6
(MCOIX)MFS Capital Opportunities	43.2	28.9
(MLDDX)MSDW Market Leaders	39.3	24.3
(MAFGX)Merrill Lynch Fundamental Growth	37.8	25.5
Quantitative Growth & Income	37.8	21.3
Avg. Large-Cap Blend Fund	17.7	15.0
S&P 500	11.9	16.5
Source: Morningstar. Performance through Sept. 28.

Under the Hood The stocks with the biggest weighting in the combined portfolios of the funds listed above.
Stock	Weighting in Winning Funds	Number of Funds in Top-10 Funds That Own the Stock
Cisco Systems(CSCO)	2.3%	8
EMC(EMC)	2.3	7
General Electric(GE)	2.0	7
Citigroup(C)	2.0	9
Intel(INTC)	1.9	6
Siebel Systems(SEBL)	1.6	5
Nortel Networks(NT)	1.6	6
Tyco International(TYC)	1.4	5
Sun Microsystems(SUNW)	1.3	5
Pfizer(PFE)	1.2	5
Source: Morningstar. Holdings as of most recent portfolio reports.

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