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 changing 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 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.
Northern Global Tactical Asset Allocation Fund BBALX seeks to provide growth of capital and income for the long run. BBALX generally invests its assets in exchange-traded or underlying funds, which are usually managed by Northern Trust (NASDAQ:NTRS) Investments, Inc. Northern Global Tactical Asset Allocation has returned 10.1% over the last one-year period.
Daniel Phillips is one of the fund managers of BBALX since 2011.
AdvisorOne CLS Shelter Fund N CLSHX invests a bulk of its assets in U.S. Treasury bills, money market funds, open-end and closed-end mutual funds and exchange traded funds all investing in equity securities. CLSHX seeks to minimize the effect of equity market declines. AdvisorOne CLS Shelter Fund N has returned 15.2% over the last one-year period.
CLSHX has an expense ratio of 1.15% compared with the category average of 1.34%.
Dodge & Cox Balanced Fund DODBX seeks a high level of income, preservation of principal and prospects for growth of principal and income in the long run. DODBX invests in a broad portfolio of common stocks, preferred stocks and debt securities. The fund may also invest almost 75% of its assets in equity securities. Dodge & Cox Balanced Fund has returned 17.6% over the last one-year period.
As of March 2017, DODBX held 405 issues, with 2.73% of its assets invested in Bank of America Corporation (NYSE:BAC).
Fidelity Asset Manager 70% Fund FASGX seeks maximization of returns for the long run. FASGX achieves its objective by investing the lion’s share of its assets in stocks, bonds, short-term instruments and other investments. Fidelity Asset Manager 70% Fund has returned 13.8% over the last one-year period.
FASGX has an expense ratio of 0.71% compared with the category average of 0.85%.
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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Zacks Investment Research