Balanced funds provide investors with the convenience of buying into a single fund rather holding both equity and bond funds. This category of funds also reduces a portfolio’s volatility while providing higher returns than pure fixed income investments. Fund managers of such funds also enjoy the flexibility of varying the proportion of equity and fixed income investments in response to market conditions. An upswing may prompt them to hold a relatively higher share of equity in order to maximize gains; whereas a downturn sees them turning to fixed income investments to stem losses.
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.
Fairholme Allocation (FAAFX) seeks total return over the long term. It invests in a portfolio of investments in fixed income, equity or cash and cash equivalent asset classes. The fund may allocate any amount to these asset classes. Investments may be parked in any, all or none of these asset classes. This balanced mutual fund returned 27.56% over the last one year period.
This non-diversified fund has an expense ratio of 1.00% as compared to category average of 1.24%.
MainStay Moderate Growth Allocation A (MGDAX) seeks capital appreciation over the long term. The fund aims to meet its objective by investing in mutual funds that are managed by MainStay. The fund invests heavily in underlying equity securities. Around 20% of its assets may be invested in funds that are constituted by fixed income instruments. The balanced mutual fund returned 17.73% over the last one year period.
Jonathan Swaney is the fund manager and has managed this fund since 2005.
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 7.85% over the last one year period.
As of February 2014, the fund held 2055 issues with 0.97% of its assets invested in Microsoft Corporation.
Franklin Balanced A (FBLAX) seeks capital growth and income. It invests in dividend yielding stocks, debt securities and convertible instruments. A minimum of 25% of its assets are invested in debt securities. It aims to invest a maximum of 15% of its assets in foreign securities. This balanced mutual fund returned 11.07% over the last one year period.
The fund has an expense ratio of 1.11% as compared to category average of 0.97%.
Intrepid Capital (ICMBX) seeks capital growth on a long-term basis along with high income. This non-diversified fund mostly invests in undervalued small and mid-cap equity and high yield securities generally with a maturity period ranging between two and six years. This balanced mutual fund returned 13.77% over the last one year period.
Mark I. Travis is the fund manager and has managed this fund since 2005.
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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