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. Arrow Managed Futures Strategy MFTFX, Metropolitan West AlphaTrak 500 MWATX and BlackRock Tactical Opportunities Inv PCBAX. 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 Strategy 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 Strategy Fund has three-year annualized returns of 17.6%. As of the end of January 2024, MFTFX had 77.1% of its net assets invested in short-term investment.
Metropolitan West AlphaTrak 500 fund invests most of its assets in fixed-income investments, comprising securities rated as investment grade or unrated securities. MWATX advisors maintain a portfolio duration of up to three years and a dollar-weighted average maturity of up to five years.
Metropolitan West AlphaTrak 500 Fund has three-year annualized returns of 6.1%. MWATX has an expense ratio of 0.45%.
BlackRock Tactical Opportunities Inv fund seeks long-term capital appreciation by using a macro asset allocation strategy, investing different percentages of its portfolio in global stocks, bonds, money market instruments, cash and foreign currencies. PCBAX’s advisor may choose to invest in common stocks, preferred stocks and depositary receipts.
BlackRock Tactical Opportunities Inv has three-year annualized returns of 5.1%. Philip J. Green has been one of the fund managers of PCBAX since April 2006.
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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