By creating a diversified portfolio of both stocks and bonds, balanced 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.
Calvert Balanced A (CSIFX) invests 60% of its net assets in stocks and 40% to bonds and related instruments. Equity investments mainly constitute common stock of large-cap companies. The fund also invests in securities issued by institutions such as the FNMA and the FHLMC. This balanced mutual fund returned 9.67% over the last one year period.
The balanced mutual fund has a minimum initial investment of $2,000 and an expense ratio of 1.22% compared to a category average of 0.98%.
Principal Global Diversified Income A (PGBAX) seeks regular cash income. The fund invests a large share of its assets in high yield bond securities, preferred securities, asset backed securities and those issued from emerging markets. The fund also purchases global real estate and infrastructure equity securities. This balanced mutual fund returned 14.01% over the last one year period.
As of January 2013, this balanced mutual fund held 1378 issues, with 0.66% of its total assets invested in Enterprise Products Partners LP.
Leuthold Asset Allocation Retail (LAALX) invests 30% to 70% of its assets in common stock and other equity securities. 20% to 60% of its assets are utilized to purchase bonds and other debt instruments, except money market securities. A maximum of 20% of its assets are invested in money market securities. The balanced mutual fund returned 6.75% over the last one year period.
Steven R. Leuthold is the fund manager and has managed this balanced mutual fund since 2006.
Lord Abbett Global Allocation A (LAGEX) seeks total return. The fund invests in a combination of fixed income instruments and equity securities issued by governments and firms of different nations. It invests in a minimum of three countries, including U.S. The fund may also invest in emerging market securities. The balanced mutual fund returned 14.06% in the last one year period.
The balanced mutual fund has a minimum initial investment of $1,000 and an expense ratio of 0.28% compared to a category average of 1.18%.
Mairs & Power Balanced (MAPOX) invests in common stock, related convertible securities and also fixed-income instruments. The fund also purchases investment grade fixed-income instruments with relatively higher ratings. The balanced mutual fund returned 17.04% in the last one year period.
William B. Frels is the fund manager and has managed this balanced mutual fund since 1992.
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.
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