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 Fund Class A MFTFX, AQR Managed Futures Strategy Fund Class I AQMIX and Fidelity Balanced Fund FBALX. 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 Class A seeks its investment objective by investing in a fixed-income strategy and a managed-futures strategy. Using its fixed-income strategy, it invests most 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 small 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 Class A has three-year annualized returns of 11.6%. As of the end of January 2022, MFTFX had 1 issue, with 51.03% of its net assets invested in short-term investments.
AQR Managed Futures Strategy Fund Class I allocates most of its net assets in commodities, currencies, fixed-income and equities. AQMIX invests in instruments like futures, futures-related instruments, forwards, swaps and index futures.
AQR Managed Futures Strategy Fund Class I has three-year annualized returns of 9.0%. AQMIX has an expense ratio of 1.24% compared with the category average of 1.68%.
Fidelity Balanced Fund invests most of its net assets in stocks and other equity securities. FBALX also invests a small portion of its assets in high-yield debt securities or junk bonds and other lower-quality debt securities.
Fidelity Balanced Fund has three-year annualized returns of 8.8%. Steven Kaye has been one of the fund managers of FBALX since September 2008.
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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