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Mutual Fund Commentary

By holding a diversified portfolio of stocks and bonds balanced funds combine the benefits of both these instruments. Thus, investors seeking both capital growth and a steady income flow at low levels of risk would do well to consider this category of funds. The better managed balanced funds keep the proportion of assets invested in different asset classes flexible and make changes according to market conditions. This approach allows for an investor to enjoy gains from the stock market, as well as some protection from losses during a market downturn.

Below we will share with you 5 top rated balanced 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, then click here.

Thrivent Balanced A (AABFX - MF report) seeks to provide both long term capital appreciation and a steady income flow. Up to 35-75% of its stocks are invested in common stocks, 25-50% in fixed-income securities and up to 40% in money market instruments. This balanced fund returned 45.11% over the last one year period.

Gregory R. Anderson is the fund manager and he has managed this balanced fund since 2005.

State Farm Balanced (STFBX) invests 60% to 75% of its assets in common stocks. At least 25% of its assets are used to purchase fixed income securities. This includes preferred stock and debt securities with longer maturity periods; rated investment grade. The fund has a five year annualized return of 4.98%. 

The balanced fund has a minimum initial investment of $250 and an expense ratio of 0.14% compared to a category average of 1.02%.

T. Rowe Price Personal Strategy Balanced (TRPBX - MF report) seeks high total return with and equal emphasis on capital appreciation and current income. It invests in a diversified portfolio which usually consists of 60% equity, 30% bonds and 10% money market securities. The fund has a ten year annualized return of 5.04%.

Edmund M. Notzon III is the fund manager and he has managed this balanced fund since 1998.

Pioneer Classic Balanced A (AOBLX - MF report) invests at least 35% of its assets in equity and debt securities. However, such investments are limited to 60% of its net assets. Up to 25% of its assets are used to purchase foreign securities. Not more than 5% of its assets may be invested in emerging market securities. The fund returned 37.82% in the last one year period.

As of March 2010, this balanced fund held 383 issues, with 2.99% of its total assets invested in Philip Morris International Inc.

Lord Abbett Balanced Strategy A (LABFX) seeks capital appreciation and current income. It invests in a combination of underlying funds which in turn invest in stocks, bonds and money market instruments. The fund returned 44.59% in the last one year and has a ten year annualized return of 4.43%.

The balanced fund has a minimum initial investment of $1000 and an expense ratio of 0.27% compared to a category average of 1.02%.

To view the Zacks Rank and past performance of all balanced funds, then click here.

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 at http://www.zacks.com/funds/mutualfund/

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