Mid-cap value mutual funds provide excellent opportunities for investors looking for returns with lesser risk by gaining exposure to stocks that are available at a discounted price. While large companies 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. Companies with market capitalization between $2 billion and $10 billion are generally considered mid-cap firms.

Meanwhile, value mutual funds are those that invest in stocks trading at discounts to book value, plus having low price-to-earnings ratio and high dividend yields. Value investing is always a very popular strategy, and for a good reason. After all, who doesn’t want to find stocks that have low PEs, a solid outlook, and decent dividends? 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.

Below we share with you 3 top-rated mid-cap value mutual funds. Each has earned a Zacks Mutual Fund Rank #1 (Strong Buy) and is expected to outperform its peers in the future. To view the Zacks Rank and past performance of all mid-cap value mutual funds, investors can click here to see the complete list of mid-cap value funds .

Lord Abbett Mid Cap Stock A (LAVLX - MF report) seeks capital growth. LAVLX invests heavily in securities of undervalued companies having medium size market capitalization. LAVLX invests in companies located throughout the globe. LAVLX may also invest in ADRs. The Lord Abbett Mid Cap Stock A fund has a three-year annualized return of 8.3%.

As of September 2015, LAVLX held 79 issues, with 2.58% of its assets invested in Hartford Financial Services Group Inc.

Sterling Capital Mid Value A (OVEAX - MF report) invests the lion’s share of its assets in equity securities of undervalued mid cap companies. According to the advisors, a mid cap company is defined as one with market capitalization within $1 billion to $30 billion. OVEAX predominantly invests in common stocks of both domestic and foreign firms that are traded in the U.S. The Sterling Capital Mid Value A fund has a three-year annualized return of 10.2%.

OVEAX has an expense ratio of 1.19% as compared to the category average of 1.21%.

Federated Absolute Return A (FMAAX - MF report) seeks positive return consistent with low level of correlation with the U.S. equity market. FMAAX invests in both equity and debt securities of both U.S. and non-U.S. issuers. FMAAX focuses on acquiring securities that are believed to be mispriced or misperceived. The Federated Absolute Return A fund has a three-year annualized return of 3.5%.

Dana L. Meissner is the fund manager of FMAAX since 2009.