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Is American Funds Balanced F1 (BALFX) a Strong Mutual Fund Pick Right Now?
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If you've been stuck searching for Allocation Balanced funds, consider American Funds Balanced F1 (BALFX - Free Report) as a possibility. BALFX carries a Zacks Mutual Fund Rank of 1 (Strong Buy), which is based on nine forecasting factors like size, cost, and past performance.
Objective
BALFX is one of many Zacks' Allocation Balanced mutual funds to pick from. Allocation Balanced funds seek to invest in a balance of asset types, like stocks, bonds, and cash, though including precious metals or commodities is not unusual; these funds are mostly categorized by their respective asset allocation. Investors utilize Allocation Balanced funds as a way to get a good start with diversified mutual funds, as well as for core holdings in a portfolio of funds.
History of Fund/Manager
BALFX is a part of the American Funds family of funds, a company based out of Los Angeles, CA. Since American Funds Balanced F1 made its debut in July of 1975, BALFX has garnered more than $4.83 billion in assets. The fund's current manager is a team of investment professionals.
Performance
Investors naturally seek funds with strong performance. BALFX has a 5-year annualized total return of 9.71% and it sits in the top third among its category peers. Investors who prefer analyzing shorter time frames should look at its 3-year annualized total return of 10.47%, which places it in the top third during this time-frame.
When looking at a fund's performance, it is also important to note the standard deviation of the returns. The lower the standard deviation, the less volatility the fund experiences. BALFX's standard deviation over the past three years is 5.8% compared to the category average of 8.58%. The fund's standard deviation over the past 5 years is 6.37% compared to the category average of 8.38%. This makes the fund less volatile than its peers over the past half-decade.
Risk Factors
Investors cannot discount the risks to this segment though, as it is always important to remember the downside for any potential investment. BALFX lost 36.96% in the most recent bear market and outperformed its peer group by 0.82%. These results could imply that the fund is a better choice than its peers during a sliding market environment.
Even still, the fund has a 5-year beta of 0.64, so investors should note that it is hypothetically less volatile than the market at large. Alpha is an additional metric to take into consideration, since it represents a portfolio's performance on a risk-adjusted basis relative to a benchmark, which in this case, is the S&P 500. BALFX has generated a positive alpha over the past five years of 0.33, demonstrating that managers in this portfolio are skilled in picking securities that generate better-than-benchmark returns.
Expenses
For investors, taking a closer look at cost-related metrics is key, since costs are increasingly important for mutual fund investing. Competition is heating up in this space, and a lower cost product will likely outperform its otherwise identical counterpart, all things being equal. In terms of fees, BALFX is a no load fund. It has an expense ratio of 0.65% compared to the category average of 0.89%. So, BALFX is actually cheaper than its peers from a cost perspective.
This fund requires a minimum initial investment of $250, and each subsequent investment should be at least $50.
Bottom Line
Overall, American Funds Balanced F1 ( BALFX ) has a high Zacks Mutual Fund rank, and in conjunction with its comparatively strong performance, average downside risk, and lower fees, American Funds Balanced F1 ( BALFX ) looks like a good potential choice for investors right now.
Don't stop here for your research on Allocation Balanced funds. We also have plenty more on our site in order to help you find the best possible fund for your portfolio. Make sure to check out www.zacks.com/funds/mutual-funds for more information about the world of funds, and feel free to compare BALFX to its peers as well for additional information. Want to learn even more? We have a full suite of tools on stocks that you can use to find the best choices for your portfolio too, no matter what kind of investor you are.
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Is American Funds Balanced F1 (BALFX) a Strong Mutual Fund Pick Right Now?
If you've been stuck searching for Allocation Balanced funds, consider American Funds Balanced F1 (BALFX - Free Report) as a possibility. BALFX carries a Zacks Mutual Fund Rank of 1 (Strong Buy), which is based on nine forecasting factors like size, cost, and past performance.
Objective
BALFX is one of many Zacks' Allocation Balanced mutual funds to pick from. Allocation Balanced funds seek to invest in a balance of asset types, like stocks, bonds, and cash, though including precious metals or commodities is not unusual; these funds are mostly categorized by their respective asset allocation. Investors utilize Allocation Balanced funds as a way to get a good start with diversified mutual funds, as well as for core holdings in a portfolio of funds.
History of Fund/Manager
BALFX is a part of the American Funds family of funds, a company based out of Los Angeles, CA. Since American Funds Balanced F1 made its debut in July of 1975, BALFX has garnered more than $4.83 billion in assets. The fund's current manager is a team of investment professionals.
Performance
Investors naturally seek funds with strong performance. BALFX has a 5-year annualized total return of 9.71% and it sits in the top third among its category peers. Investors who prefer analyzing shorter time frames should look at its 3-year annualized total return of 10.47%, which places it in the top third during this time-frame.
When looking at a fund's performance, it is also important to note the standard deviation of the returns. The lower the standard deviation, the less volatility the fund experiences. BALFX's standard deviation over the past three years is 5.8% compared to the category average of 8.58%. The fund's standard deviation over the past 5 years is 6.37% compared to the category average of 8.38%. This makes the fund less volatile than its peers over the past half-decade.
Risk Factors
Investors cannot discount the risks to this segment though, as it is always important to remember the downside for any potential investment. BALFX lost 36.96% in the most recent bear market and outperformed its peer group by 0.82%. These results could imply that the fund is a better choice than its peers during a sliding market environment.
Even still, the fund has a 5-year beta of 0.64, so investors should note that it is hypothetically less volatile than the market at large. Alpha is an additional metric to take into consideration, since it represents a portfolio's performance on a risk-adjusted basis relative to a benchmark, which in this case, is the S&P 500. BALFX has generated a positive alpha over the past five years of 0.33, demonstrating that managers in this portfolio are skilled in picking securities that generate better-than-benchmark returns.
Expenses
For investors, taking a closer look at cost-related metrics is key, since costs are increasingly important for mutual fund investing. Competition is heating up in this space, and a lower cost product will likely outperform its otherwise identical counterpart, all things being equal. In terms of fees, BALFX is a no load fund. It has an expense ratio of 0.65% compared to the category average of 0.89%. So, BALFX is actually cheaper than its peers from a cost perspective.
This fund requires a minimum initial investment of $250, and each subsequent investment should be at least $50.
Bottom Line
Overall, American Funds Balanced F1 ( BALFX ) has a high Zacks Mutual Fund rank, and in conjunction with its comparatively strong performance, average downside risk, and lower fees, American Funds Balanced F1 ( BALFX ) looks like a good potential choice for investors right now.
Don't stop here for your research on Allocation Balanced funds. We also have plenty more on our site in order to help you find the best possible fund for your portfolio. Make sure to check out www.zacks.com/funds/mutual-funds for more information about the world of funds, and feel free to compare BALFX to its peers as well for additional information. Want to learn even more? We have a full suite of tools on stocks that you can use to find the best choices for your portfolio too, no matter what kind of investor you are.