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By creating a diversified portfolio of both stocks and bonds, balanced funds ensure that they harness the inherent strengths of both classes of instruments. Most of the competently managed funds in this category keep the proportion of assets invested in different asset classes flexible and make adjustments in keeping with prevailing market conditions. This ensures that fixed-income securities protect the portfolio from losses during a downturn while equity securities harness maximum gains from a rising market.
Below we will share with you 5 top rated balanced mutual funds. Each has earned a Zacks #1 Rank (Strong Buy) as we expect the fund to outperform its peers in the future. To view the Zacks Rank and past performance of all balanced funds, investors can click here to see the complete list of funds.
Putnam Capital Spectrum A (PVSAX - MF report) invests a large share of its assets in equity securities and fixed income instruments. It also invests in bank loans of leveraged US firms. It may invest in both growth and value stocks of domestic firms with significant leverage. The balanced mutual fund is non-diversified and has returned 36.77% over the last one year period.
David Glancy is the fund manager and has managed this fund since 2009.
Prudential Growth Allocation A (JDAAX) seeks capital growth over the long term. It is a fund of funds and invests in mutual funds under the Prudential Investments fund family. Almost 90% is invested in underlying funds that in turn invest in fixed-income securities. Though it is a non-diversified, it may invest in diversified underlying holdings. The fund has returned 19.71% over the last one year period.
The fund has an expense ratio of 0.75% as compared to category average of 0.88%.
JPMorgan Income Builder A (JNBAX - MF report) invests in domestic as well as foreign debt and equity securities. The fund may invest nearly all its assets in junk bonds and equity securities rated below investment grade. The fund may invest in any number of countries and may also focus on a single nation. The balanced mutual fund has returned 8.45% over the last one year period.
As of December 2013, the fund held 2031 issues with 0.92% of its assets invested in Microsoft Corporation.
MainStay Moderate Growth Allocation A (MGDAX - MF report) seeks capital appreciation over the long term. The fund aims to meet its objective by investing in mutual funds that are managed by MainStay. The fund invests heavily in underlying equity securities. Around 20% of its assets may be invested in funds that are constituted by fixed income instruments. The balanced mutual fund returned 21.39% over the last one year period.
Jonathan Swaney is the fund manager and has managed this fund since 2005.
BlackRock Growth Prepared Portfolio Investor A (BAGPX - MF report) seeks capital growth over the long term. It is a fund of funds and invests majority of its assets in underlying funds which invest in equity. Around 20% of its assets are invested in funds that invest in fixed income securities and may comprise exchange traded funds. The balanced mutual fund returned 21.55% over the last one year period.
The fund has an expense ratio of 0.58% as compared to its category average of 0.97%.
To view the Zacks Rank and past performance of all balanced mutual funds, investors can click here to see the complete list of funds.
About Zacks Mutual Fund Rank
By applying the Zacks Rank to mutual funds, investors can find funds that not only outpaced the market in the past but are also expected to outperform going forward. Learn more about the Zacks Mutual Fund Rank.