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Mutual Fund Commentary

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.

Fidelity Balanced (FBALX - MF report) seeks to provide both capital appreciation and income. Around 60% of the fund’s assets are utilized to purchase equity securities. The balance is invested in debt securities, including those of lower quality. A minimum of 25% are utilized to purchase fixed-income senior securities. The balanced mutual fund returned 9.12% over the last one year period.

Pramod D. Atluri is the fund manager and has managed this balanced mutual fund since 2012.

HighMark Balanced invests around 50% to 70% of the fund’s assets are utilized to purchase equity securities. A minimum of 25% of its assets are used to purchase fixed income instruments. Common stocks of large cap firms constitute the majority of its equity investments. This balanced mutual fund returned 8.46% over the last one year period.

The balanced mutual fund has an expense ratio of 0.99% compared to a category average of 0.98%.

Plumb Balanced (PLBBX - MF report) seeks high total return. The fund invests in a wide range of common stocks and fixed income instruments. Generally, a minimum of 50% and 25% of its assets are invested in common stocks and fixed income senior securities respectively. The balanced mutual fund returned 1.49% in the last one year period.

Thomas Plumb is the fund manager and has managed this balanced mutual fund since 2007.

State Farm Balanced (STFBX - MF report) invests 60% to 75% of its assets in common stocks. A minimum of 25% of its assets are used to purchase fixed income instruments. This includes bonds issued by domestic corporate firms and governments; rated investment grade. This balanced mutual fund returned 6.95% over the last one year period.

As of December 2012, this balanced mutual fund held 273 issues, with 3.93% of its total assets invested in Walt Disney Co.

Mairs & Power Balanced (MAPOX - MF report) seeks current income and invests in a wide range of securities. The fund invests in common stock, related convertible securities and also fixed-income instruments. The fund also purchases investment grade fixed-income instruments with relatively higher ratings. The balanced mutual fund returned 15.73% in the last one year period.

The balanced mutual fund has a minimum initial investment of $2,500 and an expense ratio of 0.74% compared to a category average of 0.98%.

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.

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