For investors seeking both capital appreciation and regular income, balanced funds could be the best possible choice. These funds ensure that gains from the stock market are accompanied by relatively low levels of volatility since they combine the benefits of both stocks and bonds. This helps them to harness the benefits of a market upswing while protecting invested capital during difficult times. The better funds in this category keep the proportion of equity, debt and money market instruments flexible to further enhance these unique benefits.
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.
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 five year annualized return of 5.76%.
The balanced mutual fund has a minimum initial investment of $500 and an expense ratio of 1.37% compared to a category average of 1.01%.
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 16.72% over the last one year period.
As of January 2011, this balanced mutual fund held 232 issues, with 2.34% of its total assets invested in US Treasury Note 2.625%.
Weitz Balanced (WBALX) invests 50% to 75% of its assets in common stocks, rights warrants and convertible preferred stock. The fund invests in equity securities regardless of the size of the issuer. Up to 20% of its assets are invested in debt securities rated below investment grade. The balanced mutual fund has a three year annualized return of 3.16%.
The fund manager is Bradley P. Hinton and he has managed this balanced mutual fund since 2003.
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 5.62%.
The balanced mutual fund has a minimum initial investment of $2,500 and an expense ratio of 0.68% compared to a category average of 1.01%.
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. This balanced mutual fund returned 16.44% over the last one year period.
The fund manager is Robert S. Dow and he has managed this balanced mutual fund since 2007.
To view the Zacks Rank and past performance of all balanced mutual funds, then click here.