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5 Balanced Funds to Anchor Your Portfolio Against Volatility
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The U.S. markets remain volatile, as investors are cautious about the valuation of artificial intelligence and the high cost of sustaining the AI revolution. Major indexes, such as the Dow Jones Industrial Average and the S&P 500, held near record levels due to cooling inflation and steady job growth. Nasdaq lagged and remained slightly negative for the year. Market participants are rotating to steady industrial growth stocks while remaining cautious about high-valuation software and technology companies.
While companies tied to semiconductor equipment reported strong results, some software and real estate stocks sold off as investors reassessed how AI could reshape jobs and their business models. Weaker guidance and sector-specific challenges from several companies also led to selective declines.
Economic data were largely supportive. The Consumer Price Index for the month of January rose just 0.2%, while the annual inflation slowing to 2.4% and core inflation at 2.5%, the lowest core reading in nearly five years. Housing data also surprised to the upside, with strong gains in housing starts and building permits. January’s labor market report showed 130,000 new positions added, well above the Street’s estimate of 70,000. The unemployment rate dipped to 4.3% from 4.4% in December. Wage growth cooled to 3.7% year over year, helping ease inflation concerns.
Keeping in mind current volatility in domestic and global financial markets, investors who lack professional expertise in managing funds, can consider parking their money in these five balanced mutual funds: Sit Balanced Fund (SIBAX - Free Report) , Fidelity Balanced Fund (FBALX - Free Report) , State Farm Balanced Fund (STFBX - Free Report) , Vanguard Wellington Income Fund (VWELX - Free Report) and T. Rowe Price Balanced Fund (RPBAX - Free Report) that are expected to give a positive return in such uncertain times.
The above-mentioned funds have wide exposure in sectors such as industrial cyclical, technology, finance and retail, which are expected to perform well in the long term.
Why Balanced Fund
Balanced funds, otherwise known as hybrid funds usually invest in equity and debt instruments in various proportions, depending upon the market conditions. The primary aim of these funds is to provide investors with a stable return having a balance between risk and capital appreciation. Also, these mutual funds are believed to provide higher returns than pure, fixed-income investments.
Thus, from an investment standpoint, balanced mutual funds should be good choices since they provide low-cost and uncomplicated equity funds that can help investors meet their goals. These funds, by the way, have given impressive 3-year and 5-year returns, boast a Zacks Mutual Fund Rank #1 (Strong Buy), offer a minimum initial investment within $5,000, and carry a low expense ratio of less than 1%. Mutual funds, in general, reduce transaction costs and diversify portfolios without an array of commission charges that are mostly associated with stock purchases (read more: Mutual Funds: Advantages, Disadvantages, and How They Make Investors Money).
Sit Balanced Fund invests its assets in common stocks of domestic growth companies with a capitalization of $5 billion or more. SIBAX advisors also invest primarily in debt securities for the fixed-income portion of the fund's portfolio.
Roger J. Sit has been the lead manager of SIBAX since June 27, 2008. Most of the fund’s holdings were in companies like NVIDIA (8.4%), Microsoft (5.3%) and Broadcom (5.1%) as of Sep. 30, 2025.
SIBAX’s 3-year and 5-year returns are 16.2% and 9%, respectively. SIBAX has an annual expense ratio of 0.80%.
To see how this fund performed compared to its category, and other 1 and 2 Ranked Mutual Funds, please click here.
Fidelity Balanced Fund invests most of its net assets in a portfolio consisting of equity securities, bonds, and other debt securities, including lower-quality debt securities and junk bonds. FBALX advisors also invest a small portion of their assets in fixed-income senior securities.
Steven Kaye has been the lead manager of FBALX since Sep 29, 2008. Most of the fund’s holdings were in companies like NVIDIA (5.6%), Microsoft (5.2%) and Apple (4.4%) as of Aug. 31, 2025.
FBALX’s 3-year and 5-year returns are 15.9% and 10%, respectively. FBALX has an annual expense ratio of 0.46%.
State Farm Balanced Fund invests most of its net assets in equity securities of preferably large and medium-cap companies. STFBX advisors consider large and medium-cap companies as defined by S&P Dow Jones Indices at the time of investment.
Christine Tinker has been the lead manager of STFBX since Mar 30, 2021. Most of the fund’s holdings were in companies like Apple (7.6%), NVIDIA (5.7%) and Caterpillar (4.1%) as of Sep. 30, 2025.
STFBX’s 3-year and 5-year returns are 14.4% and 10.7%, respectively. STFBX has a Zacks has an annual expense ratio of 0.14%.
Vanguard Wellington Income Fund invests more than half of its net assets, mostly in dividend-paying equity securities of established large-cap companies that according to the fund manager can generate moderate level of current income. VWELX advisors also invest in fixed-income securities like investment-grade corporate bonds, government agency bonds, and mortgage-backed securities.
Loren L. Moran has been the lead manager of VWELX since Jan 26, 2017. Most of the fund’s holdings were in companies like NVIDIA (5.6%), Microsoft (5.2%) and Apple (4.2%) as of Aug. 31, 2025.
VWELX’s 3-year and 5-year returns are 14.1% and 9.7%, respectively. VWELX has an annual expense ratio of 0.24%.
T. Rowe Price Balanced Fund invests most of its assets in a portfolio of stocks and fixed-income senior securities based on market conditions. RPBAX advisors may also invest in foreign issues.
Christina Noonan has been the lead manager of RPBAX since Jan. 1, 2025. Most of the fund’s holdings are in companies like NVIDIA (3.3%), Microsoft (2.9%) and Apple (2.2%) as of Sep. 30, 2025.
RPBAX’s 3-year and 5-year returns are 13.9% and 8.1%, respectively. RPBAX has an annual expense ratio of 0.56%
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5 Balanced Funds to Anchor Your Portfolio Against Volatility
The U.S. markets remain volatile, as investors are cautious about the valuation of artificial intelligence and the high cost of sustaining the AI revolution. Major indexes, such as the Dow Jones Industrial Average and the S&P 500, held near record levels due to cooling inflation and steady job growth. Nasdaq lagged and remained slightly negative for the year. Market participants are rotating to steady industrial growth stocks while remaining cautious about high-valuation software and technology companies.
While companies tied to semiconductor equipment reported strong results, some software and real estate stocks sold off as investors reassessed how AI could reshape jobs and their business models. Weaker guidance and sector-specific challenges from several companies also led to selective declines.
Economic data were largely supportive. The Consumer Price Index for the month of January rose just 0.2%, while the annual inflation slowing to 2.4% and core inflation at 2.5%, the lowest core reading in nearly five years. Housing data also surprised to the upside, with strong gains in housing starts and building permits. January’s labor market report showed 130,000 new positions added, well above the Street’s estimate of 70,000. The unemployment rate dipped to 4.3% from 4.4% in December. Wage growth cooled to 3.7% year over year, helping ease inflation concerns.
Keeping in mind current volatility in domestic and global financial markets, investors who lack professional expertise in managing funds, can consider parking their money in these five balanced mutual funds: Sit Balanced Fund (SIBAX - Free Report) , Fidelity Balanced Fund (FBALX - Free Report) , State Farm Balanced Fund (STFBX - Free Report) , Vanguard Wellington Income Fund (VWELX - Free Report) and T. Rowe Price Balanced Fund (RPBAX - Free Report) that are expected to give a positive return in such uncertain times.
The above-mentioned funds have wide exposure in sectors such as industrial cyclical, technology, finance and retail, which are expected to perform well in the long term.
Why Balanced Fund
Balanced funds, otherwise known as hybrid funds usually invest in equity and debt instruments in various proportions, depending upon the market conditions. The primary aim of these funds is to provide investors with a stable return having a balance between risk and capital appreciation. Also, these mutual funds are believed to provide higher returns than pure, fixed-income investments.
Thus, from an investment standpoint, balanced mutual funds should be good choices since they provide low-cost and uncomplicated equity funds that can help investors meet their goals. These funds, by the way, have given impressive 3-year and 5-year returns, boast a Zacks Mutual Fund Rank #1 (Strong Buy), offer a minimum initial investment within $5,000, and carry a low expense ratio of less than 1%. Mutual funds, in general, reduce transaction costs and diversify portfolios without an array of commission charges that are mostly associated with stock purchases (read more: Mutual Funds: Advantages, Disadvantages, and How They Make Investors Money).
Sit Balanced Fund invests its assets in common stocks of domestic growth companies with a capitalization of $5 billion or more. SIBAX advisors also invest primarily in debt securities for the fixed-income portion of the fund's portfolio.
Roger J. Sit has been the lead manager of SIBAX since June 27, 2008. Most of the fund’s holdings were in companies like NVIDIA (8.4%), Microsoft (5.3%) and Broadcom (5.1%) as of Sep. 30, 2025.
SIBAX’s 3-year and 5-year returns are 16.2% and 9%, respectively. SIBAX has an annual expense ratio of 0.80%.
To see how this fund performed compared to its category, and other 1 and 2 Ranked Mutual Funds, please click here.
Fidelity Balanced Fund invests most of its net assets in a portfolio consisting of equity securities, bonds, and other debt securities, including lower-quality debt securities and junk bonds. FBALX advisors also invest a small portion of their assets in fixed-income senior securities.
Steven Kaye has been the lead manager of FBALX since Sep 29, 2008. Most of the fund’s holdings were in companies like NVIDIA (5.6%), Microsoft (5.2%) and Apple (4.4%) as of Aug. 31, 2025.
FBALX’s 3-year and 5-year returns are 15.9% and 10%, respectively. FBALX has an annual expense ratio of 0.46%.
State Farm Balanced Fund invests most of its net assets in equity securities of preferably large and medium-cap companies. STFBX advisors consider large and medium-cap companies as defined by S&P Dow Jones Indices at the time of investment.
Christine Tinker has been the lead manager of STFBX since Mar 30, 2021. Most of the fund’s holdings were in companies like Apple (7.6%), NVIDIA (5.7%) and Caterpillar (4.1%) as of Sep. 30, 2025.
STFBX’s 3-year and 5-year returns are 14.4% and 10.7%, respectively. STFBX has a Zacks has an annual expense ratio of 0.14%.
Vanguard Wellington Income Fund invests more than half of its net assets, mostly in dividend-paying equity securities of established large-cap companies that according to the fund manager can generate moderate level of current income. VWELX advisors also invest in fixed-income securities like investment-grade corporate bonds, government agency bonds, and mortgage-backed securities.
Loren L. Moran has been the lead manager of VWELX since Jan 26, 2017. Most of the fund’s holdings were in companies like NVIDIA (5.6%), Microsoft (5.2%) and Apple (4.2%) as of Aug. 31, 2025.
VWELX’s 3-year and 5-year returns are 14.1% and 9.7%, respectively. VWELX has an annual expense ratio of 0.24%.
T. Rowe Price Balanced Fund invests most of its assets in a portfolio of stocks and fixed-income senior securities based on market conditions. RPBAX advisors may also invest in foreign issues.
Christina Noonan has been the lead manager of RPBAX since Jan. 1, 2025. Most of the fund’s holdings are in companies like NVIDIA (3.3%), Microsoft (2.9%) and Apple (2.2%) as of Sep. 30, 2025.
RPBAX’s 3-year and 5-year returns are 13.9% and 8.1%, respectively. RPBAX has an annual expense ratio of 0.56%
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Zacks’ free Fund Newsletter will brief you on top news and analysis, as well as top-performing mutual funds, each week. Get it free >>