Investors seeking total return, both regular income and long term capital appreciation, should include balanced funds in their portfolio. Balanced funds are perhaps the most flexible and actively managed category of mutual funds as their investments offer exposure across a variety of asset classes and sectors. Such funds often rebalance their portfolios on the basis of current economic and market trends in order to meet their investment objective. Moreover, these funds not only seek to provide good returns during favorable market conditions, but also provide protection against substantial capital loss during difficult times.
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.
American Century Balanced Investment (TWBIX - MF report) seeks long term capital appreciation and high current income. The fund invests 60% of its assets in equity shares of large cap domestic companies and the remainder in high and medium rated non money market fixed income securities. The balanced mutual fund returned 7.88% in the last one year period.
The balanced mutual fund has an expense ratio of 0.90% compared to a category average of 1.00%.
Mairs & Power Balanced Fund (MBLAX - MF report) seeks high total income, and targets a minimum 25% excess over and above the returns of the S&P 500 Index. It invests in a synchronized blend of equity shares, convertible securities and high investment grade debt instruments. The balanced mutual fund returned 5.55% in the last one year period.
The fund manager is William B. Frels and he has managed this balanced mutual fund since 1992.
Transamerica Asset Management (IBALX - MF report) invests in a mix of equity, long term debt and money market instruments. Although the fund seeks to maintain a debt-equity ratio of 2:3, it may also invest in derivative instruments. The balanced mutual fund returned 4.5% in the last one year period.
The balanced mutual fund an expense ratio of 1.46% compared to a category average of 1.01%.
Buffalo Balanced Fund (BUFBX - MF report) seeks capital appreciation and high current income. The fund invests in a wide spectrum of instruments like common stocks, convertible and non-convertible preferred stocks, convertible and non convertible debt securities, and junk bonds. The balanced mutual fund returned 9.6% in the last one year period.
As of December 2011, this balanced mutual fund held 90 issues, with 9.31% of its total assets invested in Fidelity Institutional Money Market Fund Government I.