If you’ve been stuck searching for Allocation Balanced funds, consider American Funds Balanced F1 (BALFX) as a possibility. BALFX possesses a Zacks Mutual Fund Rank of 1 (Strong Buy), which is based on nine forecasting factors like size, cost, and past performance.
BALFX is one of many Zacks’ Allocation Balanced mutual funds to pick from. Allocation Balanced funds seek to invest in a balance of asset types, like stocks, bonds, and cash, though including precious metals or commodities is not unusual; these funds are mostly categorized by their respective asset allocation. Investors utilize Allocation Balanced funds as a way to get a good start with diversified mutual funds, as well as for core holdings in a portfolio of funds.
History of Fund/Manager
American Funds is based in Los Angeles, CA, and is the manager of BALFX. American Funds Balanced F1 debuted in July of 1975. Since then, BALFX has accumulated assets of about $5.11 billion, according to the most recently available information. The fund is currently managed by a team of investment professionals.
Of course, investors look for strong performance in funds. This fund has delivered a 5-year annualized total return of 11.01%, and is in the middle third among its category peers. But if you are looking for a shorter time frame, it is also worth looking at its 3-year annualized total return of 11.5%, which places it in the middle third during this time-frame.
When looking at a fund’s performance, it is also important to note the standard deviation of the returns. The lower the standard deviation, the less volatility the fund experiences. The standard deviation of BALFX over the past three years is 10.77% compared to the category average of 14.86%. The standard deviation of the fund over the past 5 years is 8.76% compared to the category average of 12.28%. This makes the fund less volatile than its peers over the past half-decade.
The fund has a 5-year beta of 0.57, so investors should note that it is hypothetically less volatile than the market at large. Alpha is an additional metric to take into consideration, since it represents a portfolio’s performance on a risk-adjusted basis relative to a benchmark, which in this case, is the S&P 500. BALFX’s 5-year performance has produced a positive alpha of 0.25, which means managers in this portfolio are skilled in picking securities that generate better-than-benchmark returns.
As competition heats up in the mutual fund market, costs become increasingly important. Compared to its otherwise identical counterpart, a low-cost product will be an outperformer, all other things being equal. Thus, taking a closer look at cost-related metrics is vital for investors. In terms of fees, BALFX is a no load fund. It has an expense ratio of 0.62% compared to the category average of 0.89%. BALFX is actually cheaper than its peers when you consider factors like cost.
Investors need to be aware that with this product, the minimum initial investment is $250; each subsequent investment needs to be at least $50.
Overall, American Funds Balanced F1 ( BALFX ) has a high Zacks Mutual Fund rank, and in conjunction with its comparatively similar performance, average downside risk, and lower fees, this fund looks like a good potential choice for investors right now.
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