By creating a diversified portfolio of both stocks and bonds, balanced funds ensure that they harness the inherent strengths of both classes of instruments. Most of the competently managed funds in this category keep the proportion of assets invested in different asset classes flexible and make adjustments in keeping with prevailing market conditions. This ensures that fixed-income securities protect the portfolio from losses during a downturn while equity securities harness maximum gains from a rising market.
Below we will share with you 5 top balanced mutual funds. Each has earned a Zacks #1 Rank (Strong Buy) as we expect these mutual funds to outperform their peers in the future. To view the Zacks Rank and past performance of all balanced mutual funds, investors can click here to see the complete list of funds.
Transamerica Multi-Managed Balanced A (IBALX - Free Report) seeks total return. The fund primarily invests in a diversified portfolio of stocks, bonds and money market instruments. It fulfills its objective by investing about 60% of its assets in equity securities and the remaining of its assets in fixed-income securities. It may invest a maximum 10% of its assets in emerging market debt securities and up to 10% in high-yield debt securities. However, its investment is limited to 15% in aggregate between emerging market debt and high-yield securities. The balanced mutual fund has returned almost 11% over the last one year period.
As of December 2014, the fund held 641 issues with 2.12% of its assets invested in Apple Inc
Dodge & Cox Balanced (DODBX - Free Report) invests in a range of equities and debt securities. It mostly invests in companies that are believed to be undervalued and have a promising long term growth potential. It might invest a maximum of 20% of its assets in securities of foreign issuers that are denominated in U.S. dollar, not traded on the S&P 500. The balanced mutual fund has returned 8.1% over the last one year period.
The fund has an expense ratio of 0.53% as compared to category average of 0.92%.
Hartford Balanced A (ITTAX - Free Report) seeks total return over the long run. The fund allocates 50-70% of its assets in equities and remaining in debt and cash instruments. It maintains a maximum of 10% of its assets in cash or cash equivalents. It primarily focuses on acquiring stocks of large cap companies having market capitalizations identical to those included in the S&P 500 Index. The fund may invest a maximum of 20% of its assets in non-US companies. The balanced mutual fund has returned 10.8% over the last one year period.
As of January 2015, the fund held 490 issues with 2.32% of its assets invested in Apple Inc
Invesco Income Allocation A (ALAAX - Free Report) invests in underlying funds and ETFs suggested by Invesco Advisers, Inc. and PowerShares Capital Management LLC, respectively. The underlying funds in turn invest in both U.S. and non-U.S. companies, fixed income instruments and REITs. It allocates 60%-70% of its assets in fixed-income instruments and 30%-40% in equities. The balanced mutual fund has returned 8.2% over the last one year period.
Gary Wendler is the portfolio manager and has managed this fund since 2005.
Pioneer Classic Balanced A (AOBLX - Free Report) seeks capital appreciation along with current income. The fund generally invests between 35% and 65% of its assets in both equity and debt securities. It invests in debt securities having broad range of maturities. It maintains an average portfolio maturity that may vary depending upon the investment advisor’s judgment. The balanced mutual fund has returned 10.8% over the last one year period.
As of February 2015, the fund held 487 issues with 2.47% of its assets invested in Microsoft Corp
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 www.zacks.com/funds/mutual-funds.