Balanced mutual funds are an excellent choice for investors seeking both capital growth and steady income. Investing in this class of funds ensures that gains from rising markets are garnered only at lower levels of risk. The composition of their portfolios also ensures that capital invested is protected during difficult times. Moreover, many balanced funds keep the relative share of equity and debt flexible so that they can respond appropriately to changing market conditions.
Below we will share with you 5 top rated balanced mutual funds. Each has earned a Zacks #1 Rank (Strong Buy) as we expect these mutual funds to outperform its peers in the future.
T. Rowe Price Personal Strategy Balanced (TRPBX) seeks high total return with and equal emphasis on capital appreciation and current income. It invests in a diversified portfolio which usually consists of 60% equity, 30% bonds and 10% money market securities. The balanced mutual fund has a ten year annualized return of 5.59%. The balanced mutual fund has a minimum initial investment of $2,500 and an expense ratio of 0.66% compared to a category average of 1.01%.
Pioneer Classic Balanced A (AOBLX) invests 35% to 60% of its assets in equity and debt securities. Not more than 25% of its assets are used to purchase foreign securities. Up to 5% of its assets may be invested in securities issued from emerging markets. The balanced mutual fund has a five year annualized return of 4.54%.
As of November 2010, this balanced mutual fund held 395 issues, with 2.40% of its total assets invested in Teva Pharmaceutical Industries, Ltd. ADR.
Transamerica Balanced A (IBALX) seeks capital appreciation with the secondary objective of current income. The remainder of its assets is utilized to purchase high quality bonds with maturity periods not exceeding 30 years. This balanced mutual fund returned 23.92% in the last one year period.
The fund manager is Greg Haendel and he has managed this balanced mutual fund since 2008.
Lord Abbett Balanced Strategy A (LABFX) invests in a combination of underlying funds which in turn invest in stocks, bonds and money market instruments. The securities held by these funds include common and preferred stocks, high-yield debt securities and money market instruments. The balanced mutual fund returned 11.87% in the last one year and has a ten year annualized return of 4.53%.
The balanced mutual fund has a minimum initial investment of $1,000 and an expense ratio of 0.27% compared to a category average of 1.01%.
J Hancock Balanced A (SVBAX) seeks current income and capital appreciation over the long term. It invests in a wide range of equity and debt securities. At least 25% of its assets are invested in equity securities and not more than 25% is used to purchase senior debt securities. The balanced mutual fund has a five year annualized return of 7.68%.
The fund manager is Roger C. Hamilton and he has managed this balanced mutual fund since 2003.
To view the Zacks Rank and past performance of all balanced mutual funds, then click here.