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.
Vanguard Balanced Index Investor VBINX employs an indexing investment approach to track the performance of two benchmark indexes that measure the investment return of the overall U.S. stock market. At least 60% of its assets track the investment performance of the CRSP U.S. Total Market Index, while the remaining portion tracks the investment performance of the Barclays U.S. Aggregate Float Adjusted Index. Vanguard Balanced Index Investor has a three-year annualized return of 6.1%.
VBINX has an expense ratio of 0.22%, lower than the category average of 0.86%.
Lord Abbett Multi-Asset Balanced Opportunity A LABFX seeks both current income and capital growth. LABFX is a "fund-of-funds" that generally invests in affiliated mutual funds managed by Lord, Abbett & Co. LLC. LABFX invests primarily in U.S. equity securities and fixed income securities. The fund applies a blend strategy that helps it to gain exposure to both growth and value stocks. Lord Abbett Multi-Asset Balanced Opportunity A has a three-year annualized return of 3.3%.
Giulio Martini is one of the fund managers and has managed LABFX since 2015.
T. Rowe Price Personal Strategy Balanced TRPBX invests around 60% of its assets in stocks, 35% in bonds and 5% in alternative investments. TRPBX seeks total return with an emphasis on both capital growth and income. T. Rowe Price Personal Strategy Balanced has a three-year annualized return of 4.6%.
As of September 2016, TRPBX held 1620 issues with 4.24% of its assets invested in T. Rowe Price Instl Emerging Mkts Eq.
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. Pick the best mutual funds with the Zacks Rank.
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 (LABFX): Fund Analysis Report
Get Your Free (VBINX): Fund Analysis Report
Get Your Free (TRPBX): Fund Analysis Report
To read this article on Zacks.com click here.
Zacks Investment Research