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Investors seeking capital appreciation and regular income would do well to invest in balanced funds. This category of funds ensure that gains from surging markets are accompanied by lower levels of risk since they harness the strengths of equity as well as fixed income securities. The composition of their portfolios also ensures that capital invested is protected during difficult times. Moreover, many balanced funds keep the relative share of equity and debt flexible so that they can respond appropriately to changing market conditions.
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.
Weitz Balanced (WBALX - MF report) seeks capital preservation, growth and current income. The fund invests 50% to 75% of its assets in common stocks, rights warrants and convertible preferred stock. A minimum of 25% of the fund’s assets are utilized to purchase fixed-income securities rated investment grade. The balanced mutual fund returned 10.78% in the last one year period.
The balanced mutual fund has a minimum initial investment of $2,500 and an expense ratio of 1.14% compared to a category average of 1.00%.
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 balanced mutual fund returned 7.10% in the last one year period.
The fund manager is Paul Eckley and he has managed this balanced mutual fund since 1991.
Lord Abbett Balanced Strategy A (LABFX - MF report) seeks both current income and capital appreciation. The fund invests in a combination of underlying funds which in turn invest in stocks, bonds and money market instruments. This balanced mutual fund returned 12.74% over the last one year period.
The balanced mutual fund has a minimum initial investment of $1,500 and an expense ratio of 0.28% compared to a category average of 1.00%.
Davis Appreciation & Income A (RPFCX - MF report) invests in common stock and preferred stock, bonds as well as cash. The fund focuses on investing in domestic firms, but may also invest in foreign companies. It selects common stock issued by growth oriented companies, regardless of their size. The balanced mutual fund returned 4.14% in the last one year period.
As of September 2012, this balanced mutual fund held 50 issues, with 4.50% of its total assets invested in Kohl's Corp.
Mairs & Power Balanced (MAPOX - MF report) seeks both capital growth and current income. It focuses on acquiring common stock, related convertible securities as well as fixed-income securities. The fund focuses on acquiring investment grade fixed-income securities with higher ratings. The balanced mutual fund returned 17.57% in the last one year period.
The fund manager is William B. Frels and he has managed this balanced mutual fund since 1992.
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.