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.
Lord Abbett Multi-Asset Growth A (LWSAX) invests in mutual funds that are managed by Lord, Abbett & Co. LLC. The underlying funds invest in domestic equity securities and fixed income instruments and in foreign securities. The underlying funds may also invest in both growth and value stocks. The balanced mutual fund returned 14.93% over the last one year period.
The fund has an expense ratio of 0.31% as compared to category average of 0.91%.
Franklin Templeton Founding Allocation A (FFALX) invests equal portion 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 16.80% over the last one year period.
T. Anthony Coffey is the fund manager and has managed this fund since 2003.
American Century Investments Balanced Investor (TWBIX) seeks capital appreciation and current income. The fund allocates 60% of the assets in large-cap, publicly-listed domestic equities while the remaining portion is invested in bonds and other fixed-income securities such as diversified high-medium-grade non-money market debt securities. The balanced mutual fund has returned 13.49% over the last one year period.
As of March 2014, the fund held 906 issues with 2.19% of its assets invested in Apple Inc.
American Funds Global Balanced A (GBLAX) 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 14.67% over the last one year period.
The fund has an expense ratio of 0.93% as compared to category average of 1.08%.
Putnam Dynamic Asset Allocation Growth A (PAEAX) seeks capital growth over 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 may also invest in fixed income securities of both domestic and foreign governments and corporate debts. Investments are also made in other derivatives including futures, warrants and swap contracts. The balanced mutual fund has returned 17.11% over the last one year period.
As of March 2014, the fund held 2, 191 issues with 1.53% of its assets invested in FNMA.
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.
Read the analyst report on LWSAX
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Read the analyst report on TWBIX
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