By creating a diversified portfolio of both stocks and bonds, balanced funds ensure that they harness the inherent strengths of both classes of instruments. Most of the competently managed funds in this category keep the proportion of assets invested in different asset classes flexible and make adjustments in keeping with prevailing market conditions. This ensures that fixed-income securities protect the portfolio from losses during a downturn while equity securities harness maximum gains from a rising market.
Below we will share with you 5 top balanced mutual funds. Each has earned a Zacks #1 Rank (Strong Buy) as we expect these mutual funds to outperform their peers in the future. To view the Zacks Rank and past performance of all balanced mutual funds, investors can click here to see the complete list of funds.
Transamerica Multi-Managed Balanced AÂ (IBALXÂ -Â MF report) seeks total return. The fund primarily invests in a diversified portfolio of stocks, bonds and money market instruments. It fulfills its objective by investing about 60% of its assets in equity securities and the remaining of its assets in fixed-income securities. It may invest a maximum 10% of its assets in emerging market debt securities and up to 10% in high-yield debt securities. However, its investment is limited to 15% in aggregate between emerging market debt and high-yield securities. The balanced mutual fund has returned almost 11% over the last one year period.
As of December 2014, the fund held 641 issues with 2.12% of its assets invested in Apple Inc. (AAPL)
Dodge & Cox Balanced (DODBX - MF report) invests in a range of equities and debt securities. It mostly invests in companies that are believed to be undervalued and have a promising long term growth potential. It might invest a maximum of 20% of its assets in securities of foreign issuers that are denominated in U.S. dollar, not traded on the S&P 500 (SPY). The balanced mutual fund has returned 8.1% over the last one year period.
