Top 5 Balanced Mutual Funds (June 2011)

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. 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 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.

Victory Balanced A (SBALX) seeks to provide current income and capital appreciation over the long term. Between 40 to 75% of the fund’s assets are utilized to purchase equity and convertible securities and at least 25% of its assets are invested in debt and preferred stock. The balanced mutual fund returned 10.16% over the last one year period.

The balanced mutual fund has a minimum initial investment of $2,500 and an expense ratio of 1.15% compared to a category average of 0.99%.

Wells Fargo Advantage WealthBuilder Growth Balanced (WBGBX) invests 62% of its assets in equity funds, 33% in bond funds and only 10% in alternative strategy funds. These underlying funds may be both affiliated and non-affiliated. The balanced mutual fund has a ten year annualized return of 2.69%.

The fund manager is Jeffrey Mellas and he has managed this balanced mutual fund since 2003.

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. The balanced mutual fund returned 11.13% over the last one year period.

The balanced mutual fund has a minimum initial investment of $2,500 and an expense ratio of 1.17% compared to a category average of 0.99%.

Ivy Balanced A (IBNAX) invests in a diversified portfolio of equity, debt and short term instruments, the composition of which depends on current market conditions. The fund focuses on investing in large and mid-cap companies which pay regular dividends. The balanced mutual fund has a three year annualized return of 5.74%.

As of March 2011, this balanced mutual fund held 131 issues, with 2.95% of its total assets invested in Toyota Motor Credit Corp.

Virtus Balanced A (PHBLX) seeks to provide reasonable income and capital growth over the long term. At least 65% of its assets are utilized to purchase domestic and foreign common stocks and fixed income securities. This balanced mutual fund returned 16.8% over the last one year period.

Robert E. Bishop is the fund manager and has managed this balanced fund since 2009.

To view the Zacks Rank and past performance of all balanced mutual funds, then click here.

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 at http://www.zacks.com/funds/mutualfund.

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