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. 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 may cause them to turn 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.
Fidelity Balanced (FBALX) seeks both capital appreciation and income. The fund utilizes around 60% of its assets to purchase equity securities. The remainder of its assets is invested in debt securities, including those of lower quality. The balanced mutual fund returned 6.43% in the last one year period.
The Fund Manager is Tobias Welo and he has managed this balanced mutual fund since 2011.
AllianceBern Balanced Shares A (CABNX) invests in a wide range of equity and debt securities. Between 60% to 75% of its assets are invested in equity securities and 40% to 60% of its assets are utilized to purchase fixed income securities. The balanced mutual fund has a ten year annualized return of 4.24%.
As of September 2011, this balanced mutual fund held 270 issues, with 3.95% of its total assets invested in Alliancebernstein Fixed-Income Shares, Inc. - Government Stif Por.
GAMCO Westwood Balanced AAA (WEBAX) seeks both capital growth and current income. The fund invests in both equity and debt, but it is balanced in favor of equity securities and seeks to provide returns similar to pure equity portfolios. The balanced mutual fund returned 4.6% in the last one year period.
The balanced mutual fund has a minimum initial investment of $1,000 and an expense ratio of 1.24% compared to a category average of 1.03%.
MEMBERS Diversified Income A (MBLAX) invests in a wide range of securities such as domestic and foreign bonds and common stock and money market securities. A maximum of 80% of its assets may be invested in bonds and up to 70% in stocks. The balanced mutual fund has a three year annualized return of 8.06%.
The Fund Manager is John H. Brown and he has managed this balanced mutual fund since 1998.
Ivy Balanced A (IBNAX) seeks to provide current income with a secondary objective of capital growth. The fund invests in a diversified portfolio of equity, debt and short term instruments, the composition of which depends on current market conditions. The balanced mutual fund has a five year annualized return of 4.92%.
The balanced mutual fund has a minimum initial investment of $500 and an expense ratio of 1.30% compared to a category average of 1.03%.