By creating a diversified portfolio of both stocks and bonds, balanced funds ensure that they harness the inherent strengths of both classes of instruments. 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 4 top-rated balanced mutual funds . Each has earned a Zacks Mutual Fund Rank #1 (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 .
American Funds American Balanced Fund A (ABALX) invests in both common stocks and bonds that are rated investment grade. It also invests in securities that are issued by the U.S. government and its entities. Moreover, ABALX may invest in securities of issuers located in foreign lands. It primarily invests in common stocks of companies that are believed to provide dividend income. The American Funds American Balanced Fund A has a three-year annualized return of 8%.
ABALX has an expense ratio of 0.59% as compared to the category average of 0.89%.
T. Rowe Price Personal Strategy Balanced (TRPBX) seeks to achieve maximum total return through capital appreciation and income. TRPBX invests between 60% of its assets in stocks and 40% of its assets in bonds. TRPBX also invests in money market securities. The T. Rowe Price Personal Strategy Balanced fund has a three-year annualized return of 5.1%.
Charles M. Shriver is the fund manager since 2011.
Fidelity Balanced (FBALX) invests around 60% of its assets in equity securities and the remainder in a balance of debt securities including bonds and lower-quality debt instruments. FBALX is expected to invest a minimum of one-fourth of its assets in fixed-income senior securities. FBALX invests in securities throughout the globe. The Fidelity Balanced fund has a three-year annualized return of 7.1%.
As of January 2016, the fund held 1186 issues with 2.45% of its assets invested in Fidelity Cent Invt Portfolios.
Nuveen Strategy Balanced Allocation A (FSGNX) seeks capital appreciation and current income. FSGNX invests in underlying funds to allocate its assets in both equity and fixed income securities. FSGNX primarily invests a larger share of its assets in equity funds compared to fixed income funds. The Nuveen Strategy Balanced Allocation A fund has a three-year annualized return of 3.6%.
FSGNX has an expense ratio of 0.5% as compared to the category average of 0.89%.
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.
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