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 raise 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, Arrow Managed Futures Strategy MFTFX and Schwab MarketTrack All Equity 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.
Fidelity Balanced Fund has three-year annualized returns of 7.2%. FBALX has an expense ratio of 0.48%.
Arrow Managed Futures Strategy seeks to implement fixed-income and managed-futures strategies. Using its fixed-income strategy, it invests part of its net assets in U.S. government securities, fixed-income securities, money-market instruments, overnight and fixed-term repurchase agreements, cash and other cash equivalents with maturities of one year or less. MFTFX also invests a portion of its net assets in a wholly owned and controlled subsidiary to seek returns through its managed futures strategy.
Arrow Managed Futures Strategy has three-year annualized returns of 12.6%. As of October 2024, MFTFX held one issue with 88.6% of its assets invested in TOTAL SHORT-TERM INVESTMENT.
Schwab MarketTrack All Equity 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 stock investments.
Schwab MarketTrack All Equity has three-year annualized returns of 7.9%. 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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This article originally published on Zacks Investment Research (zacks.com).
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