Investors interested in maintaining exposure to both equity and fixed-income securities may consider investing in balanced mutual funds. Also, these mutual funds are believed to provide greater returns than pure, fixed-income investments while maintaining a low volatility level.
The proportion of equity and fixed-income investments in these funds may also vary in response to market conditions. While managers may increase the share of fixed-income securities during a downturn to avoid losses, the share of equity securities may be increased in a bullish market. Hence, these funds are expected to harness the inherent strengths of both classes of investments.
Below we share with you three top-ranked balanced mutual funds, namely Fidelity Balanced Fund FBALX, State Farm Balanced Fund STFBX and Schwab MarketTrack All Equity Portfolio SWEGX. 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 funds.
Fidelity Balanced Fund aims for income and capital growth that is on par with reasonable risk by investing the majority of its assets in stocks and other equity securities and the rest in bonds and other debt securities. FBALX has returned 9.7% in the past three years.
FBALX has an expense ratio of 0.49% compared with the category average of 0.84%.
State Farm Balanced Fund invests the majority of its total assets in common stocks, usually in companies with a market capitalization of at least $1.5 billion at the time of investment. STFBX also invests part of its assets in fixed-income securities. The fund has returned 9.1% over the past three years.
As of March 2022, STFBX held 158 issues, with 15.6% of its assets invested in TOTAL US TREASURY BONDS.
Schwab MarketTrack All Equity Portfolio maintains a defined asset allocation in stock investments, with certain percentages for different segments of the stock market. SWEGX invests the majority of its net assets in common stock. The fund has returned 8.5% over the past three years.
Zifan Tang has been one of the fund managers of SWEGX since 2012.
To view the Zacks Rank and the past performance of all balanced mutual funds, investors can click here to see the complete list of balanced mutual funds.
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