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 balanced mutual funds, viz. Arrow Managed Futures Stragegy Fund MFTFX, Davis Appreciation & Income Fund RPFCX and Dodge & Cox Balanced Fund DODBX. 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.
Arrow Managed Futures Stragegy Fund seeks to implement a fixed-income strategy and a managed-futures strategy. 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 Stragegy Fund has three-year annualized returns of 21.3%. MFTFX has an expense ratio of 1.43% compared with the category average of 1.68%.
Davis Appreciation & Income Fund seeks total return through a combination of growth and income. RPFCX invests in net assets in convertible securities mainly bonds and preferred stocks.
Davis Appreciation & Income Fund has three-year annualized returns of 10.7%. Creston A. King has been one of the fund managers of RPFCX since June 2016.
Dodge & Cox Balanced Fund seeks regular income, conservation of principal and an opportunity for long-term growth of principal and income. DODBX invests in a diversified portfolio of common stocks, preferred stocks and fixed-income securities.
Dodge & Cox Balanced Fund has three-year annualized returns of 10.2%. As of June 2023, DODBX has invested 2.5% of its assets in Fiserv, Inc.
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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