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 lowers a portfolio’s volatility, while providing higher returns than pure fixed income investments.
The fund managers 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 while a downturn will see them turning to fixed income investments to stem losses.
Below we will share with you three top-rated balanced mutual funds. Each has earned a Zacks Mutual Fund Rank #1 (Strong Buy) and is expected to outperform its peers in the future. Investors can click here to see the complete list of balanced mutual funds, their Zacks Rank and past performance.
Dodge & Cox Balanced (DODBX - Free Report) invests in both equity and debt securities. DODBX invests around 25% to 75% of the total assets in equity securities. The fund may also invest a maximum 20% of its assets in U.S. dollar-denominated securities of non-U.S. issuers traded in the country that are not on the S&P 500 Index. Dodge & Cox Balanced has a three-year annualized return of 8.5%.
DODBX has an expense ratio of 0.53% compared with the category average of 0.86%.
Mairs & Power Balanced Investor (MAPOX - Free Report) seeks current income and preservation of capital. The fund invests in U.S. common stocks as well as fixed income securities including corporate bonds and United States government securities. It may also invest in mortgage-backed securities. The fund may also invest in securities of foreign issuers represented by American Depositary Receipts or are listed on a United States stock exchange. Mairs & Power Balanced Investor has a three-year annualized return of 6.5%.
Ronald Kaliebe is one of the portfolio managers of MAPOX since 2006.
VALIC Company I Asset Allocation (VCAAX - Free Report) allocates its assets across stocks, long-term debt securities and short-term money market securities to provide maximum returns. VCAAX may vary the proportions of assets in respective classes according to the market condition. The fund may also invest all of its assets in a particular asset category. VALIC Company I Asset Allocation has returned 0.5% in the year-to-date frame.
VCAAX has an expense ratio of 0.7%, lower than the category average of 0.86%.
To view the Zacks Rank and past performance of all balanced mutual funds, investors can click here to see the complete list of funds.
Want key mutual fund info delivered straight to your inbox?
Zacks’ free Fund Newsletter will brief you on top news and analysis, as well as top-performing mutual funds, each week. Get it free >>