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.
Lord Abbett Balanced Strategy A (LABFX) seeks both current income and capital appreciation. The fund invests predominantly in domestic equity and fixed income instruments. However, it may also invest in foreign instruments. This balanced mutual fund returned 14.70% over the last one year period.
The balanced mutual fund has a minimum initial investment of $1,500 and an expense ratio of 0.28% compared to a category average of 0.98%.
Davis Appreciation & Income A (RPFCX) invests in common stock and preferred stock, bonds as well as cash. The fund focuses on investing in domestic firms, but may also invest in foreign companies. It selects common stock issued by growth oriented companies, regardless of their size. The balanced mutual fund returned 8.44% in the last one year period.
As of September 2012, this balanced mutual fund held 50 issues, with 4.50% of its total assets invested in Kohl's Corp.
Mairs & Power Balanced (MAPOX) seeks both capital growth and current income. It invests in common stock, related convertible securities and also fixed-income instruments. The fund also purchases investment grade fixed-income instruments with relatively higher ratings. The balanced mutual fund returned 17.34% in the last one year period.
William B. Frels is the fund manager and has managed this balanced mutual fund since 1992.
State Farm Balanced (STFBX) invests 60% to 75% of its assets in common stocks. At least 25% of its assets are used to purchase fixed income securities. Normally it invests in companies regardless of their sizes. This includes preferred stock and debt securities with longer maturity periods; rated investment grade. The balanced mutual fund returned 6.92% in the last one year period.
The balanced mutual fund has a minimum initial investment of $250 and an expense ratio of 0.13% compared to a category average of 0.98%.
Putnam Capital Spectrum A (PVSAX) seeks total return. The fund invests a large share of its assets in equity securities and fixed income instruments. It also invests in bank loans of leveraged firms. It may invest in both growth and value stocks of small and mid-sized domestic leveraged firms. The balanced mutual fund is non-diversified and has returned 24.14% in the last one year period.
David Glancy is the fund manager and has managed this balanced mutual fund since 2009.
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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