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 balanced mutual 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.
Schwab Balanced (SWOBX - Free Report) maintains a diversified portfolio by investing in other Schwab and/or Laudus Funds. SWOBX allocates within the range of 55% to 65% of its assets in equity securities and 35-45% in fixed income instruments. SWOBX is expected to invest a minimum of one-fourth of its assets in equity and fixed income securities. SWOBX may invest all of its assets in instruments including money market instruments, repurchase agreements and other short-term obligations in order to take a defensive stance during unfavorable market or economic conditions. The Schwab Balanced fund returned 11.5% in during the past year.
Zifan Tang is the fund manager and has managed SWOBX since 2012.
Columbia Capital Allocation Aggressive A (AXBAX - Free Report) seeks maximum total return with aggressive risk. AXBAX primarily invests in underlying funds that are backed by Columbia Management Investment Advisers, LLC. AXBAX may also invest not more than 20% of its assets other funds, which include ETFs, equity securities, fixed income securities and derivative instruments. The Columbia Capital Allocation Aggressive A fund returned 10.7% in past one year.
AXBAX has an expense ratio of 0.54% as compared to category average of 0.83%.
Vanguard Balanced Index Investor (VBINX - Free Report) invests in securities in order to replicate performances of two indexes, one of which is a market-weighted bond index and the other measures the performance of the overall U.S. stock market. VBINX invests about 60% of its assets in stocks to track the performance of the CRSP U.S. Total Market Index and allocates around 40% of its assets in fixed-income securities to track the Barclays U.S. Aggregate Float Adjusted Index’s performance. The Vanguard Balanced Index Investor fund returned 8.8% in past one year.
As of April 2015, the fund held 11,632 issues with 1.82% of its assets invested in Apple Inc.
Calvert Moderate Allocation A (CMAAX - Free Report) seeks capital growth with income appreciation over the long run. CMAAX generally invests in underlying funds of Calvert including both fixed-income and equity funds. CMAAX invests in funds depending on its criteria, which include financial, sustainability and social responsibility factors. CMAAX may also invest a portion of its assets in short-term money market instruments. The Calvert Moderate Allocation A fund returned 8.6% in past one year.
CMAAX has an expense ratio of 0.64% as compared to category average of 0.91%.
T. Rowe Price Balanced (RPBAX - Free Report) invests around 65% of its assets in common stocks of companies of any market capitalization size throughout the globe. RPBAX allocates about 35% of its assets in fixed income securities. RPBAX is expected to invest a minimum of one-fourth of its assets in senior securities and not more than 35% of its assets in non-US securities. The T. Rowe Price Balanced fund returned 7.5% in past one year.
Charles M. Shriver is the fund manager and has managed RPBAX since 2011.
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. Pick the best mutual funds with the Zacks Rank.