Balanced funds provide investors with the convenience of buying into a single fund rather than 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.
The fund managers 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 will see them shifting loyalties to fixed income investments to stem losses.
Below we will share with you three top-rated balanced mutual funds. Each has earned a Zacks Mutual Fund Rank #1 (Strong Buy) and is expected to outperform its peers in the future. Investors can click here to see the complete list of balanced mutual funds, their Zacks Rank and past performance.
T. Rowe Price Balanced Fund (MUTF:RPBAX)seeks current income, growth of capital and preservation of capital. RPBAX invests the majority of its assets in common stocks and about 35% in fixed income securities. The fund also invests a minimum of one-fourth of its assets in fixed income senior securities. T. Rowe Price Balanced has a three-year annualized return of 5.6%.
RPBAX has an expense ratio of 0.60% compared with the category average of 0.66%.
Fidelity Balanced Fund Retirement (MUTF:FBAKX)invests around 60% of its assets in various equity securities and nearly 40% of its assets in bonds and other debt securities. FBAKX seeks growth of income and capital constant with reasonable risk. Fidelity Balanced has a three-year annualized return of 7.4%.
As of February 2017, FBAKX held 1,108 issues, with 2.70% of its assets invested in Apple Inc. (NASDAQ:AAPL).
Meeder Muirfield Fund (MUTF:FLMFX)seeks growth of capital for the long run. FLMFX invests heavily in common and preferred stocks. FLMFX may also invest in underlying funds including U.S. as well as non-U.S. mutual funds. The fund also invests in ETFs and SPDRs. Meeder Muirfield has a three-year annualized return of 4.8%.
Dale Smith is one of the fund managers of FLMFX since 2005.