Balanced funds provide investors with the convenience of buying into a single fund rather than 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.
Virtus Balanced A seeks capital appreciation and capital conservation. It invests 65% of its assets in common stocks and fixed income securities of both domestic and foreign companies. These include companies from emerging economies irrespective of market capitalization. The fund invests the fixed income part of its portfolio mostly in investment grade bonds. The balanced mutual fund has returned 15.5% over the last one year period.
As of July 2014, the fund held 559 issues with 0.97% of its assets invested in EMC Corp
Virtus Tactical Allocation A (NAINX - Free Report) invests 40% to 65% of its assets in equities, 35% to 60% in fixed income instruments and a maximum of 25% of its assets in cash or cash equivalents. It invests 15% to 50% of its assets in foreign companies, through American Depositary Receipts (ADRs). It maintains a dollar-weighted average duration of 2 to 8 years. The fund seeks capital growth with income. The balanced mutual fund has returned 16.4% over the last one year period.
The fund has an expense ratio of 1.29% as compared to category average of 0.93%.
T. Rowe Price Balanced (RPBAX - Free Report) seeks capital appreciation and income. It invests 65% and 35% of its assets in common stocks and fixed income instruments, respectively. It invests a minimum of 25% of its assets in fixed income senior securities and a maximum of 35% in foreign securities. The balanced mutual fund has returned 15.6% over the last one year period.
Charles M. Shriver is the portfolio manager and has managed this fund since 2011.
Lord Abbett Multi-Asset Growth A invests in mutual funds that are managed by Lord, Abbett & Co. LLC. The underlying funds invest in domestic equity securities and fixed income instruments and in foreign securities. The underlying funds may also invest in both growth and value stocks. The balanced mutual fund returned 16.5% over the last one year period.
The fund has an expense ratio of 0.31% as compared to category average of 0.9%.
American Century Investments Balanced Investor (TWBIX - Free Report) seeks capital appreciation and current income. The fund allocates 60% of the assets in large-cap, publicly-listed domestic equities while the remaining portion is invested in bonds and other fixed-income securities such as diversified high-medium-grade non-money market debt securities. The balanced mutual fund has returned 15.9% over the last one year period.
As of June 2014, the fund held 929 issues with 2.48% of its assets invested in Apple Inc.
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 in our Mutual Fund Center.