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.
Putnam Capital Spectrum A (PVSAX) invests a large share of its assets in equity securities and fixed income instruments. It also invests in bank loans of leveraged US firms. It may invest in both growth and value stocks of domestic firms with significant leverage. The balanced mutual fund is non-diversified and has returned 31.20% over the last one year period.
The fund has an expense ratio of 1.27% as compared to category average of 1.19%.
JPMorgan Income Builder A (JNBAX) invests in domestic as well as foreign debt and equity securities. The fund may invest nearly all its assets in junk bonds and equity securities rated below investment grade. The fund may invest in any number of countries and may also focus on a single nation. The balanced mutual fund has returned 5.76% over the last one year period.
Jeffrey Geller is the fund manager and has managed this balanced mutual fund since 2007.
Principal Global Diversified Income A (PGBAX) has yield-focused strategy to seek income. It 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. The balanced mutual fund returned 4.08% over the last one year period.
As of December 2013, this mutual fund held 1514 issues with 0.69% of its assets invested in Enterprise Products Partners LP.
AllianceBern Real Asset Strategy A (AMTAX) invests its assets in inflation-protected fixed income securities. It invests in foreign securities which are linked directly to other assets and currencies. The fund invests in TIPS, equity securities and derivatives. This non-diversified balanced mutual fund has returned -6.02% over the last one year period.
The mutual fund has an expense ratio of 1.05% as compared to category average of 1.11%.
Hartford Balanced Income Fund Class A (HBLAX) seeks current income. The fund aims to invest 45% of its assets in equity securities and 55% in fixed income instruments. A maximum of 20% of its assets are utilized to purchase domestic junk bonds. This balanced mutual fund returned 8.12% over the last one year period.
Lucius T. Hill, III is the fund manager and has managed the fund since 2006.
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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