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Mutual Fund Commentary

Investors seeking capital appreciation accompanied by a steady income flow from a secure investment would do well to consider balanced funds. By combining the benefits of both stocks and bonds, this category of funds ensures that gains from equity markets are accompanied with relatively low levels of volatility. Many funds in this category vary the combination of equity, debt and money market instruments in keeping with market conditions to further enhance these unique benefits.

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, then click here.

Wells Fargo Advantage Growth Balanced (NVGBX - MF report) seeks both capital growth and current income. At present, the fund’s portfolio consists of the different equity and fixed income of various master portfolios. As per the fund’s “neutral” target allocation 655 of its assets are invested in equities and 35% in bonds. The balanced mutual fund returned 28.29% over the last one year period.

The balanced mutual fund has an expense ratio of 0.95% compared to a category average of 0.99%.

State Farm Balanced (STFBX - MF report) 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 balanced mutual fund has a ten year annualized return of 4.76%.

The Fund Manager is Paul Eckley and he has managed this balanced mutual fund since 1991.

JHancock2 Lifestyle Balanced 5 (JHLAX) seeks both current income and capital growth, but priorities the latter. The fund invests in underlying funds to meet its investment objectives. Up to 60% of its assets are invested in equity and up to 40% in fixed-income funds. The balanced mutual fund returned 23.71% in the last one year period.

The balanced mutual fund has an expense ratio of 0.06% compared to a category average of 0.99%.

Buffalo Balanced (BUFBX) invests in a mix of domestic common and preferred stocks, convertible securities, and debt. The fund’s debt investments may be rated as well as unrated and may include securities rated below investment grade. It invests a minimum of 25% of its total assets in equity and at least 25% in debt at any given time. The balanced mutual fund has a five year annualized return of 5.58%.

As of March 2011, this balanced mutual fund held 61 issues, with 9.43% of its total assets invested in Fidelity Instl MM Fds Government I.

Thrivent Balanced A (AABFX) 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 mutual fund returned 24.62% over the last one year period.

The fund manager is Michael Landreville and he has managed this balanced mutual fund since 2005.

To view the Zacks Rank and past performance of all balanced mutual 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.

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