Neuberger Berman Large Cap Value Fund [NPRTX]
By: Ted Black, CFP©
Winter 2022 (Vol. 39, No. 4)
There are always many items that can influence the mood and direction of the market. Currently, it seems reasonable to conclude that the primary drivers and focus of investors is the current level of inflation, and the more hawkish tone coming from the Federal Reserve Board (the Fed). After maintaining the opinion for most of last year that inflation was going to be transitory, the Fed recognized that their initial opinion was off the mark, and late last year issued a statement indicating so, acknowledging that inflation was more stubborn than initially thought.
The Fed’s primary tool to tame inflation is to raise short term interest rates. Based on the Fed’s latest statements, the market now believes that the Fed is likely to raise rates several times in 2022, with additional hikes possibly to come in 2023.
The level and direction of interest rates is a key variable in much of the modeling done by stock market analysts in an effort to create price targets for individual stocks and the market overall. In short, higher interest rates discount the value of future earnings more heavily than lower rates. The expectation that rates will increase this year and perhaps next creates an environment in which relatively richly valued “Growth” stocks can fall out of vogue in favor of companies that perhaps don’t have the same type of strong consistent growth, but that investors feel represent a better “Value”. This is the often talked about rotation from Growth to Value that you may be seeing/hearing from the financial press.
As its name implies, the Neuberger Berman Large Cap Value fund invests primarily in stocks that fit the Value profile. As opposed to a Growth stock fund whose largest holdings may include companies such as Apple, Amazon, Microsoft and Google, amongst the largest holdings in this fund are Procter & Gamble, JP Morgan Chase, General Electric, Bank of America and Pfizer. With an enviable long-term track record and a vastly experienced management team, this fund deserves consideration regardless of the current mood of the market. Given that we’re currently in an environment that tends to favor the type of stocks this fund owns, it may be worth a closer look to see how this may play a role in your portfolio.
If you’re interested in this fund, or would like a portfolio review to determine if this fund might be an appropriate addition to your portfolio, please call Ted Black, CFP© at 888-878-0001, extension 3.
Performance annualized and updated through 12/31/2021: 1-Year: +28.12%; 3-Year: +22.04%; 5-Year: +15.35%. The gross annual expense ratio is 0.79%.
Statistics and information provided by Morningstar and Neuberger Berman. Please visit the Neuberger Berman website at www.nb.com/en/global/home for the most recent performance information. The principal value and investment return will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than their original cost. Returns shown, unless otherwise indicated, are total returns, including any capital gains or losses and all dividend and capital gains distributions. The performance data quoted represents past performance and in no way guarantees future results. Mutual funds are not FDIC insured.
Mutual funds are sold by prospectus. An investor should consider the investment objectives, risks, charges and expenses of the investment company carefully before investing. The prospectus contains this and other information about the investment company. Please go to www.nb.com/en/global/home or contact our office at 888-878-0001 to obtain a prospectus. Please read the prospectus carefully before you invest or send money. Advisory services offered through Royal Palm Investment Advisors, Inc., a Registered Investment Advisor.
Advisory services offered through Royal Palm Investment Advisors, Inc., a Registered Investment Advisor.