Investors looking at both long term capital growth and regular income would do well to consider balanced funds. Balanced funds ensure that gains from rising markets are accompanied by relatively lower levels of risk since they can utilize the strengths of equity as well as fixed income securities. The composition of their portfolios also ensures that the capital invested is protected during a market downturn. Moreover, many funds in this category keep the relative shares of equity, debt and money market instruments fluid to enable them to respond 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 the fund to outperform its peers in the future.
T. Rowe Price Balanced (RPBAX) seeks both current income and capital appreciation. Around 65% of the fund’s assets are utilized to purchase domestic and foreign common stocks and the balance is used to acquire fixed income instruments. The balanced mutual fund returned 13.97% over the last one year period.
The balanced mutual fund has a minimum initial investment of $2,500 and an expense ratio of 0.64% compared to a category average of 1.03%.
Fidelity Global Balanced (FGBLX) invests in both domestic and foreign debt and equity instruments. A minimum of 25% of its assets are utilized to acquire debt securities, preferred stock and other fixed-income senior securities. The balanced mutual fund has a five year annualized return of 5.25%.
The Fund Manager is Ruben Calderon and he has managed this balanced mutual fund since 2006.
Sentinel Balanced A (SEBLX) seeks both capital appreciation and current income at low levels of risk. The fund focuses on acquiring common stock and bonds rated investment grade. The balanced mutual fund has a three year annualized return of 3.19%.
The balanced mutual fund has a minimum initial investment of $1,000 and an expense ratio of 1.14% 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 ten year annualized return of 3.06%.
As of July 2011, this balanced mutual fund held 148 issues, with 6.11% of its total assets invested in State Street Instl U.S. Govt MMkt Inst.
American Funds American Balanced A (ABALX) seeks current income and protection of invested capital. The fund holds a widely diversified portfolio of securities such as bonds, stocks and U.S. government securities. A minimum of 50% of its assets are invested in common stock and up to 25% in debt securities. The balanced mutual fund returned 13.95% over the last one year period.
John H. Smet is the fund manager and has managed this balanced fund since 1997.
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.