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Mutual Fund Commentary

Balanced funds provide investors with the convenience of buying into a single fund rather holding both equity and bond funds. This category of funds also reduces a portfolio’s volatility while providing higher returns than pure fixed income investments. Fund managers of such funds also enjoy the flexibility of varying the proportion of equity and fixed income investments in response to market conditions. An upswing may prompt them to hold a relatively higher share of equity in order to maximize gains; whereas a downturn sees them turning to fixed income investments to stem losses.

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.

Franklin Balanced A (FBLAX - MF report) invests in a range of dividend generating stocks, convertible instruments and debt securities. Not more than 25% of its assets may be utilized to purchase debt securities. The balanced mutual fund returned 6.96% over the last one year period.

The balanced mutual fund has a minimum initial investment of $1,000 and an expense ratio of 1.01% compared to a category average of 1.02%.

GAMCO Westwood Balanced AAA (WEBAX - MF report) seeks current income and capital growth. The fund invests in both equity and debt securities. It is oriented in favor of equity and aims to provide returns consistent with equity securities. The balanced mutual fund returned 4.63% over the last one year period.

As of December 2011, this balanced mutual fund held 83 issues, with 5.62% of its total assets invested in Dreyfus Treasury & Agency Csh Mgmt Instl.

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 returned 4.32% over the last one year period.

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

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 4.42% over the last one year period.

The balanced mutual fund has an expense ratio of 0.95% compared to a category average of 1.02%.

Ivy Balanced A (IBNAX - MF report) invests in a diversified portfolio of equity, debt and short term instruments, the composition of which depends on current market conditions. The fund focuses on investing in large and mid-cap companies which pay regular dividends. The balanced mutual fund returned 6.51% over the last one year period.

The Fund Manager is Cynthia P. Prince-Fox and he has managed this balanced mutual fund since 2003.

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

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