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3 Balanced Mutual Funds Poised for Strong Performance

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Balanced funds offer investors the convenience of buying 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.

The fund managers also enjoy the flexibility of changing 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 to maximize gains, whereas a downturn will see them shifting loyalties toward fixed-income investments to stem losses.

Below, we share with you three top-ranked balanced mutual funds, namely Permanent Portfolio Permanent (PRPFX - Free Report) , American Funds American Balanced (ABALX - Free Report) and Vanguard Wellington Investor (VWELX - Free Report) . 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 funds.

Permanent Portfolio Permanent distributes its holdings across various asset classes, including gold, silver, Swiss franc–denominated investments, real estate and natural resource stocks, aggressive growth equities, and U.S. dollar–based assets. It maintains a concentrated portfolio and is considered non-diversified.

Permanent Portfolio Permanent has three-year annualized returns of 20.8%.  As of July 2025, PRPFX had 78 issues with 4.2% of its net assets invested in Palantir Technologies.

American Funds American Balanced pursues a balanced approach, investing in U.S. stocks, investment-grade bonds, and government-backed securities. It may also hold dividend-paying equities, bonds, and other securities from foreign issuers to enhance diversification and income potential.

American Funds American Balanced has three-year annualized returns of 16.8%. ABALX has an expense ratio of 0.56%.

Vanguard Wellington Investor primarily invests in dividend-paying stocks of well-established large companies, complemented by holdings in fixed income securities such as investment-grade corporate bonds, U.S. government and agency obligations, and mortgage-backed securities to provide stability and moderate current income.

Vanguard Wellington Investor has three-year annualized returns of 16.7%. Loren Moran has been one of the fund managers of VWELX since January 2017.

To view the Zacks Rank and the past performance of all balanced mutual funds, investors can click here to see the complete list of balanced mutual funds.

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