Value funds are those that tend to trade at prices lower than their fundamentals (i.e. earnings, book value and debt to equity). It is a common practice to invest in value funds for income or yield. However, not all value funds solely comprise companies that primarily use their earnings to pay dividends. Investors interested in choosing value funds for yield, should be sure to check the mutual fund yield. Notably, the mutual fund yield is dividend paid out divided by the value of the mutual fund’s shares.

Meanwhile, mid-cap value mutual funds provide excellent opportunities for investors seeking returns at lesser risk by gaining exposure to stocks that are available at a discounted price. While large caps are normally known for stability and the smaller ones for growth, mid caps offer the best of both the worlds, allowing growth and stability, simultaneously.

Below we will share with you three top-rated mid-cap value mutual funds. Each has earned a Zacks #1 Rank (Strong Buy) and is expected to outperform its peers in the future. Investors can click here to see the complete list of funds.

Vanguard Selected Value Fund Investor Shares VASVX seeks growth of capital and income for the long run. VASVX invests its assets heavily in undervalued stocks issued by mid-cap domestic companies. Undervalued stocks are those whose prices trade below the book value. Vanguard Selected Value Fund Investor Shares has returned 21% over the last one-year period.

Benjamin Silver is one of the fund managers of VASVX since 2017.

TIAA-CREF Mid-Cap Value Premier TRVPX invests a bulk of its assets in equity securities of mid cap companies that are believed to be undervalued according to Teachers Advisors, Inc. TRVPX seeks a high level of total return through capital growth. TRVPX focuses on acquiring equities of companies that are located in the U.S. and having market capitalization within the range of the Russell Midcap Value Index. TIAA-CREF Mid-Cap Value Premier has returned 13.9% over the last one-year period.

TRVPX has an expense ratio of 0.52% as compared with the category average of 1.22%.

MassMutual Select Mid-Cap Value Fund I MLUZX seeks capital appreciation over the long run. MLUZX invests a major portion of its assets in equity securities including common stocks, preferred stocks, warrants and rights of mid-cap companies, which are expected to be undervalued. MassMutual Select Mid-Cap Value Fund I has returned 14.4% over the last one-year period.

As of March 2017, MLUZX held 177 issues, with 2.87% of its assets invested in Northern Trust Corp.