Investors interested in maintaining exposure to both equity and fixed-income securities may consider betting on 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 increase 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 Permanent Portfolio Permanent PRPFX, American Funds American Balanced ABALX 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.
Permanent Portfolio Permanent distributes its holdings across various asset classes, including gold, silver, Swiss franc–denominated investments, real estate and natural resource stocks, aggressive growth equities and U.S. dollar–based assets. It maintains a concentrated portfolio and is considered non-diversified.
Permanent Portfolio Permanent has three-year annualized returns of 19.8%. As of July 2025, PRPFX had 78 issues with 4.2% of its net assets invested in Palantir Technologies.
American Funds American Balanced pursues a balanced approach, investing in U.S. stocks, investment-grade bonds and government-backed securities. It may also hold dividend-paying equities, bonds and other securities from foreign issuers to enhance diversification and income potential.
American Funds American Balanced has three-year annualized returns of 15%. ABALX has an expense ratio of 0.56%.
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 15.2%. Loren 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 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 >>
5 Stocks Set to Double
Each was handpicked by a Zacks expert as the #1 favorite stock to gain +100% or more in the coming year. While not all picks can be winners, previous recommendations have soared +112%, +171%, +209% and +232%.
Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.
Today, See These 5 Potential Home Runs >>View All Zacks #1 Ranked Mutual Funds
Get Your Free (ABALX): Fund Analysis Report
Get Your Free (PRPFX): 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.
