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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.
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 toward fixed-income investments to stem losses.
Below, we share with you three top-ranked balanced mutual funds, viz. AQR Managed Futures Strategy Fund AQMIX, Fidelity Balanced Fund FBALX and Vanguard Wellington Fund VWELX. 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.
AQR Managed Futures Strategy Fund allocates most of its net assets in commodities, currencies, fixed-income and equities. AQMIX invests in instruments like futures, futures-related instruments, forwards, swaps and index futures.
AQR Managed Futures Strategy Fund has three-year annualized returns of 14.3%. As of the end of September 2024, AQMIX had 865 issues with 90% of its net assets invested in short-term investment.
Fidelity Balanced Fund invests most of its net assets in stocks and other equity securities. FBALX also invests a small portion of its assets in high-yield debt securities or junk bonds and other lower-quality debt securities.
Fidelity Balanced Fund has three-year annualized returns of 4.9%. FBALX has an expense ratio of 0.48%.
Vanguard Wellington Fund invests more than half of its net assets in dividend-paying equity securities of large-cap companies. VWELX advisors also invest in fixed-income securities like investment-grade corporate bonds, government agency bonds, and mortgage-backed securities with the potential to generate current income.
Vanguard Wellington Fund has three-year annualized returns of 4%. Loren L. Moran has been one of the fund managers of VWELX since January 2017.
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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