Balanced funds offer investors 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.
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 toward fixed-income investments to stem losses.
Below, we share with you three top-rated balanced mutual funds, viz. Brown Advisory Flexible Equity Fund BAFAX, State Farm Balanced Fund STFBX and Permanent Portfolio PRPFX. Each has 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.
Brown Advisory Flexible Equity Fund invests most of its net assets, along with borrowings, if any, in a diversified equity portfolio of domestic and foreign securities, which, according to its advisors, have robust and improving long-term business prospects but whose share prices are not discounted due to such favorable fundamental attributes. BAFAX advisors generally choose to invest in medium and large market capitalization companies.
Brown Advisory Flexible Equity Fund has three-year annualized returns of 13.5%. As of the end of December 2022, BAFAX had 44 issues and 6.31% of its net assets invested in Microsoft Corp.
State Farm Balanced Fund invests most of its net assets in common stocks. STFBX advisors prefer to invest in equity securities of large and mid-capitalization companies with market capitalization within the range as defined by S&P Dow Jones Indices at the time of investment.
State Farm Balanced Fund has three-year annualized returns of 10.6%. STFBX has an expense ratio of 0.14% compared with the category average of 0.84%.
Permanent Portfolio seeks to preserve and increase the purchasing power value of its shares over the long term by investing most of its net assets in gold, silver,Swiss franc assets, common stocks of real estate and natural resources in various proportions. PRPFX advisors also invest in aggressive growth stocks and dollar assets.
Permanent Portfolio has three-year annualized returns of 10.2%. Michael Joseph Cuggino has been the fund manager of PRPFX since May 2003.
To view the Zacks Rank and the past performance of all balanced mutual funds, investors can click here to see the complete list of funds.
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