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 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, then click here.
Mairs & Power Balanced (MAPOX) seeks to provide current income which is at least 25% greater than that of the S&P 500 index. The fund focuses on acquiring common stock, related convertible securities as well as fixed-income securities. The fixed-income securities selected are usually rated relatively higher. The fund has a ten year annualized return of 5.09%.
The balanced fund has a minimum initial investment of $2,500 and an expense ratio of 0.83% compared to a category average of 1.01%.
Principal Strategic Asset Management Conservative Balanced A (SAIPX) utilizes 20 to 60% of its assets to invest in equity funds. The fund invests 40 to 80% of its assets in a mix of fixed-income funds and cash equivalents. This balanced fund returned 13.87% in the last one year period.
Dirk R. Laschanzky is the fund manager and he has managed this balanced fund since 2009.
Cavanal Hill Balanced (APBAX) seeks capital appreciation and current income. Equity securities constitute between 50-75% of its assets. At least 25% of its assets are used to purchase equity securities which are rated highly by a renowned ratings firm. The fund has a five year annualized return of 2.25%.
As of May 2010, this balanced fund held 508 issues, with 4.21% of its total assets invested in iShares MSCI EAFE Index.
CGM Mutual (SBBAX) invests 75% of its assets in equity and 25% of its assets in fixed income or debt securities. The fund selects fixed income securities with maturity periods ranging from a month to thirty years of any credit quality. Up to 35% of its assets may be used to purchase debt securities rated below investment grade. This balanced fund returned 6.39% in the last one year period.
The balanced fund has a minimum initial investment of $2,500 and an expense ratio of 1.09% compared to a category average of 1.33%.
USAA Balanced Strategy (USBSX) seeks total return, accompanied by lower risk over time. The fund seeks to achieve this objective through an asset allocation strategy which seeks both income and capital appreciation. This balanced fund has a ten year annualized return of 2.62%.
The fund manager is Arnold Espe and he has managed this balanced fund since 2004.
To view the Zacks Rank and past performance of all balanced 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/
