Investors looking to gain exposure to both equity and fixed income securities may consider balanced mutual funds. Also, these mutual funds are believed to provide greater returns than pure fixed income investments while maintaining a low volatility level.
The proportion of equity and fixed income investments in these funds may also vary in response to market conditions. While managers may raise the share of fixed income securities during a downturn to avoid losses, the share of equity securities may be increased during an upswing. Hence, these funds are expected to harness the inherent strengths of both classes of investments.
Below we will share with you three top-rated balanced mutual funds. Each has earned a Zacks Mutual Fund Rank #1 (Strong Buy) and is expected to outperform its peers in the future. Investors can click here to see the complete list of balanced mutual funds, their Zacks Rank and past performance.
Bruce Fund BRUFX seeks long-term growth of capital. BRUFX mostly invests in domestic common stocks, convertible bonds and “zero coupons” government bonds. The fund may invest in future interest and principal of U. S. government securities (“zero coupons” bonds) without any limit. Bruce Fund has a three-year annualized return of 10.9%.
BRUFX has an expense ratio of 0.68%, lower than the category average of 0.93%.
Eaton Vance Balanced B EMIFX invests its assets in common stocks and fixed-income securities. EMIFX invests in two other registered investment companies managed by Eaton Vance Management. It invests 50–75% of its assets in equity securities, and 25–50% of its assets in fixed-income securities by investing in Core Bond Portfolio. Eaton Vance Balanced B has a three-year annualized return of 10.9%.
As of June 2016, EMIFX held 401 issues with 2.95% of its assets invested in US Treasury Note 3.5%.
American Funds American Balanced F2 AMBFX seeks long-term growth of capital. AMBFX invests in both common stocks and bonds that are rated investment grade. The fund also invests in securities that are issued by the U.S. government and its entities. Moreover, AMBFX may invest in securities of issuers located in foreign lands. Primarily, AMBFX invests in common stocks of companies that are believed to offer dividend income. American Funds American Balanced F2 has a three-year annualized return of 8.6%.
AMBFX has an expense ratio of 0.39%, lower than the category average of 0.93%.
To view the Zacks Rank and past performance of all balanced mutual funds, investors can click here to see the complete list of funds.
Want key mutual fund info delivered straight to your inbox?
Zacks’ free Fund Newsletter will brief you on top news and analysis, as well as top-performing mutual funds, each week. Get it free >>
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Get Your Free (AMBFX): Fund Analysis Report
Get Your Free (EMIFX): Fund Analysis Report
Get Your Free (BRUFX): Fund Analysis Report
To read this article on Zacks.com click here.
Zacks Investment Research