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5 Top-Rated Balanced Mutual Funds to Strengthen Your Portfolio

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By creating a diversified portfolio of both stocks and bonds, balanced funds ensure that they harness the inherent strengths of both classes of instruments. This category of funds also reduces a portfolio's volatility while providing higher returns than pure fixed income investments. Fund managers of such funds also enjoy the flexibility of varying 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 in order to maximize gains; whereas a downturn sees them turning to fixed income investments to stem losses.

Below we will share with you 5 best-rated balanced mutual funds . Each has earned a Zacks Mutual Fund Rank #1 (Strong Buy) as we expect the fund to outperform its peers in the future. To view the Zacks Rank and past performance of all balanced funds, investors can click here to see the complete list of funds .

Pioneer Classic Balanced A ( AOBLX ) seeks capital appreciation along with current income. AOBLX generally invests between 35% and 65% of its assets in both equity and debt securities. AOBLX invests in debt securities having a broad range of maturities. AOBLX maintains an average portfolio maturity that may vary depending upon the investment advisor's judgment. The Pioneer Classic Balanced A fund has a three-year annualized return of 7.6%.

As of August 2015, AOBLX held 505 issues with 2.54% of its assets invested in Microsoft Corp.

T. Rowe Price Balanced ( RPBAX ) invests around 65% of its assets in common stocks of companies of any market capitalization across the world. RPBAX allocates about 35% of its assets to fixed income securities. RPBAX is expected to invest a minimum of one-fourth of its assets in senior securities and not more than 35% of its assets in non-US securities. The T. Rowe Price Balanced fund has a three-year annualized return of 7.1%.

Charles M. Shriver is the fund manager and has managed RPBAX since 2011.

RidgeWorth Moderate Allocation Strategy A ( SVMAX ) seeks current income and capital growth over the long run. In order to achieve its objective, SVMAX invests 40-60% of its assets in underlying funds that predominantly invest in equity securities. SVMAX also invests 30-60% of its assets in funds investing in fixed income securities. SVMAX invests the rest of its assets in cash and cash equivalents, which also include unaffiliated money market funds, U.S. government affiliated securities and short-term paper. The RidgeWorth Moderate Allocation Strategy A fund has a three-year annualized return of 5.3%.

SVMAX has an expense ratio of 0.67% as compared to the category average of 0.89%.

Fidelity Balanced ( FBALX ) invests around 60% of its assets in equity securities and the remainder in a balance of debt securities including bonds and lower-quality debt instruments. FBALX is expected to invest a minimum of one-fourth of its assets in fixed-income senior securities. FBALX invests in securities throughout the globe. The Fidelity Balanced fund has a three-year annualized return of 8.2%.

As of July 2015, the fund held 1211 issues with 3.12% of its assets invested in High Yield Debt Securities Directly Held.

Pioneer Flexible Opportunities A ( PMARX ) seeks total return by investing across a wide range of asset classes. PMARX invests in both equity securities and fixed income producing securities. PMARX may also invest in other securities including commodity related securities, REITs and currencies. PMARX may allocate all of its assets in securities from foreign countries, including emerging countries. The Pioneer Flexible Opportunities A fund has a three-year annualized return of 4.6%.

PMARX has an expense ratio of 1.18% as compared to the category average of 1.39%.

To view the Zacks Rank and past performance of all balanced mutual funds, investors can click here to see the complete list of funds .

About Zacks Mutual Fund Rank

By applying the Zacks Rank to mutual funds, investors can find funds that not only outpaced the market in the past but are also expected to outperform going forward. Pick the best mutual funds with the Zacks Rank.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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