Balanced funds offer investors the convenience of buying 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, namely Payson Total Return PBFDX, Virtus Duff & Phelps Real Asset Fund PDPAX and Vanguard Wellington Investor VWELX. 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.
Payson Total Return invests mainly in common stocks and convertible securities of U.S. large-cap and mid-cap companies, defined as those above $12 billion and between $2 billion and $12 billion in market capitalization. It follows a non-diversified strategy, allowing higher concentration in fewer holdings compared to diversified funds.
Payson Total Return has three-year annualized returns of 19.4%. As of December 2025, PBFDX had 28 issues with 9.7% of its net assets invested in Alphabet.
Virtus Duff & Phelps Real Asset Fund invests in affiliated and unaffiliated mutual funds and ETFs, allocating the majority of its assets to those focused on real assets such as real estate, commodities, natural resources, infrastructure and energy-related investments.
Virtus Duff & Phelps Real Asset Fund has three-year annualized returns of 12.9%. PDPAX has an expense ratio of 0.51%.
Vanguard Wellington Investor primarily invests in dividend-paying stocks of well-established large companies, complemented by holdings in fixed income securities such as investment-grade corporate bonds, U.S. government and agency obligations, and mortgage-backed securities to provide stability and moderate current income.
Vanguard Wellington Investor has three-year annualized returns of 12.7%. Loren Moran has been one of the fund managers of VWELX since 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 balanced mutual funds.
Want key mutual fund info delivered straight to your inbox?
Zacks’ free Fund Newsletter will brief you on top news and analysis, as well as top-performing mutual funds, each week. Get it free >>
Beyond Nvidia: AI's Second Wave Is Here
The AI revolution has already minted millionaires. But the stocks everyone knows about aren't likely to keep delivering the biggest profits. Little-known AI firms tackling the world's biggest problems may be more lucrative in the coming months and years.
See Stocks Now >>View All Zacks #1 Ranked Mutual Funds
Get Your Free (PDPAX): Fund Analysis Report
Get Your Free (PBFDX): Fund Analysis Report
Get Your Free (VWELX): Fund Analysis Report
This article originally published on Zacks Investment Research (zacks.com).
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
