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 sees them turning 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. To view the Zacks Rank and past performance of all balanced funds, investors can click here to see the complete list of funds.
Franklin Templeton Founding Allocation A (FFALX) seeks capital growth. It invests equal shares of its assets in underlying funds of Franklin Income Fund, Mutual Shares Fund and Templeton Growth Fund. These funds invest in both domestic and foreign companies and also invest in fixed-income and money market instruments. The balanced mutual fund has returned 16.59% over the last one year period.
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The fund has an expense ratio of 0.39% as compared to category average of 0.91%.
MainStay Moderate Growth Allocation A (MGDAX) aims to meet its objective by investing in underlying funds that are managed by MainStay. The fund invests heavily in underlying equity securities. Around 20% of its assets may be invested in funds that are constituted by fixed income instruments. The balanced mutual fund has returned 14.43% over the last one year period.
Jonathan Swaney is the fund manager and has managed this fund since 2005.
Franklin Templeton Corefolio Allocation A (FTCOX) seeks capital growth over the long run. It invests equal portion of its assets in underlying Franklin Flex Cap Growth Fund, Franklin Growth Fund, Mutual Shares Fund and Templeton Growth Fund. These funds invest in equity instruments all over the globe. The balanced mutual fund has returned 19.40% over the last one year period.
As of March 2014, the fund held 6 issues with 25.24% of its assets invested in Templeton Growth.
Calvert Aggressive Allocation A (CAAAX) is a fund of funds that invests in a number of Calvert fixed-income, equity and money market funds. The fund seeks long-term capital growth and invests in keeping with the established target asset allocation. The balanced mutual fund has returned 14.32% over the last one year period.
The fund has an expense ratio of 0.43% as compared to category average of 0.91%.
BlackRock Growth Prepared Portfolio Investor A (BAGPX) seeks capital growth over the long term. It is a fund of funds and invests majority of its assets in underlying funds which invest in equity. Around 20% of its assets are invested in funds that invest in fixed income securities and may comprise exchange traded funds. This non-diversified balanced mutual fund has returned 13.68% over the last one year period.
Philip J. Green is the fund manager and has managed this fund since 2007.
To view the Zacks Rank and past performance of all balanced mutual funds, investors can click here to see the complete list of funds.
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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.
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