Money Manager: Underperforming Megacap Stocks A Safe Bet
After the market meltdown of last week, a number of investors fled to mega cap stocks such as Citigroup, Exxon Mobil and Wal-Mart Stores, hoping the area would be a safe haven in the wake of the market meltdowns at the end of February--but huge companies with market caps of $200 billion or more did only marginally better than the overall market.
George Foley, portfolio manager for the four-star rated Glenmede Large Cap Value Fund , told CNBC's "Power Lunch" that mega cap stocks still offer investors plenty of upside.
"Year to date, even through today, the mega caps have underperformed. Since the correction ... the mega caps have performed a little better so they've been a little more resilient, but still lost money," said Foley.
"The further that spread goes I think the greater the probability that they're going to perform. These are companies that have solid earnings expectations and are paying dividends, great cash flows and balance sheets and a safe place to be."
Foley also said shares of big companies with worldwide exposure are set to benefit from a growing global economy.
"Because they're diversified, they have an opportunity that presents itself when different economies grow faster," he said. "I think the U.S.-based companies are taking advantage of export opportunities and I think they're going to continue to do well."