While small-cap stocks show strong valuations, the large-cap stock sector has traded at a discount, making it attractive, according to James Swanson, chief investment strategist with MFS Investment Management.

"Many large-cap companies are growing with a limited amount of leverage. Their ability to grow at this rate shows that they are doing it in a much more organic fashion and are not overextended with debt to finance their growth," Swanson said at an MFS year-end investment outlook luncheon on Monday at Manhattan's Le Parker Meridien Hotel. "This type of growth is much more sustainable than growth achieved through levering up their balance sheets."

Large-cap stocks returned on average 11.77 percent annually from 1926 to 2011, according to Ibbotson Associates data, compared with 16.51 percent for small-cap stocks during the same time period.

"The IT sector and industrials in the large-cap area are of interest," Swanson told Financial Advisor magazine. "These companies are flush with cash, have strong margin, earnings and yield characteristics."

Read the entire article at Financial Advisor.