2 Great Large-Cap ETFs

Both of these funds are excellent portfolio building blocks.

Russell Kinnel 9 May, 2024 | 4:52AM
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Illustration of large-cap industries such as airlines and commodity companies

I bought two ETFs recently, bringing the total number of ETFs I own up to two. Both are excellent large-cap stock funds that can serve as building blocks for your portfolio.

2 Great Large-Cap ETFs

  • T. Rowe Price Capital Appreciation Equity ETF TCAF
  • Vanguard High Dividend Yield ETF VYM

T. Rowe Price Capital Appreciation Equity TCAF, is the equity sleeve of open-end T. Rowe Price Capital Appreciation PRWCX. The open-end fund is a brilliant Gold-rated fund that has been closed to new investors for a long time. So, this relatively new ETF is your first shot at investing with David Giroux in a while. Giroux has proven to be a rare breed. He’s very good at both stock-picking and asset allocation.

In the ETF, you only get the equity sleeve, but that still appeals to me. Giroux is an eclectic equity investor who skews a bit to the growth side of the market but is flexible enough to buy value names when they appeal. His current favorite stocks are Microsoft MSFT, Nvidia NVDA, and Apple AAPL. The fund is a bargain at just 31 basis points in fees.

On the value side, I recently added to my position in Vanguard High Dividend Yield VYM in my retirement account. It’s a passive fund that tilts toward higher-yielding stocks. I’m not really interested in the income here as much as the fact that the dividend focus anchors it clearly in value, and I’m looking for a diversifier that can hold up in the next growth correction.

This Gold-rated gem will cost you a mere 6 basis points. Back in 2022, when growth got crushed, it only lost 46 basis points, placing it in the top 13% of large-value funds.

 

The author or authors own shares in one or more securities mentioned in this article. 

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Securities Mentioned in Article

Security NamePriceChange (%)Morningstar Rating
T. Rowe Price Capital Apprec Eq ETF30.75 USD0.10
Vanguard High Dividend Yield ETF121.51 USD0.26Rating

About Author

Russell Kinnel  is Morningstar's director of mutual fund research.

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