By creating a diversified portfolio of both stocks and bonds, balanced mutual funds ensure that they harness the inherent strengths of both classes of instruments. Most of the competently managed funds in this category keep the proportion of assets invested in different asset classes flexible and make adjustments in keeping with prevailing market conditions. This ensures that fixed-income securities protect the portfolio from losses during a downturn while equity securities harness maximum gains from a rising market.
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.
Invesco Income Allocation A (ALAAX) seeks current income. It invests in underlying funds and ETFs suggested by Invesco Advisers, Inc. and PowerShares Capital Management LLC, respectively. The underlying funds in turn invest in both U.S. and non-U.S. companies, fixed income instruments and REITs. It allocates 60%-70% of its assets in fixed-income instruments and 30%-40% in equities. The balanced mutual fund has returned 13.1% over the last one year period.
The fund has an expense ratio of 0.25% as compared to category average of 0.85%.
Franklin Templeton Founding Allocation A (FFALX) invests equal shares of its assets in underlying funds of Franklin Income Fund, Mutual Shares Fund and Templeton Growth Fund. These funds invest in both domestic and foreign companies and also invest in fixed-income and money market instruments. The balanced mutual fund has returned 17.6% over the last one year period.
As of June 2014, the fund held 5 issues with 33.48% of its assets invested in Franklin Income R6.
Putnam Dynamic Asset Allocation Growth A (PAEAX) seeks capital growth over the long run. It invests 65% to 95% of its assets in equities. About 5% to 35% of its assets are allocated for debt securities. It invests in companies of any market capitalization across the globe. It also invests in fixed income securities of both domestic and foreign governments and corporate debts instruments (mortgage-backed investments). The balanced mutual fund has returned 19.5% over the last one year period.
The fund has an expense ratio of 1.09% as compared to category average of 0.90%.
Eaton Vance Tax-Managed Equity Asset Allocation A (EAEAX) invests a minimum of 65% of its assets in domestic tax managed equities affiliated by the Eaton Vance organization. It may invest a maximum of 25% of its assets in Tax-Managed securities that invest in emerging or small-cap firms and a maximum of 35% of its assets in foreign equities. The balanced mutual fund has returned 20.1% over the last one year period.
Lewis R. Piantedosi is the fund manager and has managed this fund since 2013.
American Funds Global Balanced A (GBLAX) seeks long-term capital appreciation and current income. The fund invests in debt and equity securities of both domestic and foreign companies. These companies are believed to have growth potential and pay dividends. The fund invests a minimum of 45% of its assets in common stock and other equity securities. A minimum of 25% of its assets are invested in debt securities. The balanced mutual fund has returned 16% over the last one year period.
The fund has an expense ratio of 0.93% as compared to category average of 1.10%.
To view the Zacks Rank and past performance of all balanced mutual funds, investors can click here to see the complete list of funds.
About Zacks Mutual Fund Rank
By applying the Zacks Rank to mutual funds, investors can find funds that not only outpaced the market in the past but are also expected to outperform going forward. Learn more about the Zacks Mutual Fund Rank in our Mutual Fund Center.
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