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2 Great Large-Cap ETFs

Both of these funds are excellent portfolio building blocks.

2 Great Large Cap ETFs
Securities In This Article
Microsoft Corp
T. Rowe Price Capital Appreciation
T. Rowe Price Capital Apprec Eq ETF
Vanguard High Dividend Yield ETF

Russel Kinnel: 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

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

T. Rowe Price Capital Appreciation Equity, ticker 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, ticker VYM, in my 401(k) 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.

Watch 3 Core Bond Funds for the Long Haul for more from Russel Kinnel.

The author or authors own shares in one or more securities mentioned in this article. Find out about Morningstar’s editorial policies.

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About the Author

Russel Kinnel

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Russel Kinnel is director of ratings, manager research, for Morningstar Research Services LLC, a wholly owned subsidiary of Morningstar, Inc. He heads the North American Medalist Rating Committee, which vets the Morningstar Medalist Rating™ for funds. He is the editor of Morningstar FundInvestor, a monthly newsletter, and has published a number of prominent studies of the fund industry covering subjects such as manager investment, expenses, and investor returns.

Since joining Morningstar in 1994, Kinnel has analyzed virtually every type of fund and has covered the most prominent fund families, including Fidelity, T. Rowe Price, and Vanguard. He has led studies on the predictive power of fund data and helped develop the Morningstar Rating for funds and the Morningstar Style Box methodology. He was co-author of the company's first book, Morningstar Guide to Mutual Funds: 5-Star Strategies for Success (Wiley, 2003), and was author of the book Fund Spy: Morningstar's Inside Secrets to Selecting Mutual Funds That Outperform, published in 2009.

Kinnel holds a bachelor's degree in economics and journalism from the University of Wisconsin.

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