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The best balanced funds

Updated on July 6, 2012

Balanced funds have an asset allocation within the fund

Balanced funds tend to have lower risk and lower rewards. Balanced funds are mutual funds that hold a mix of stocks, bonds and sometimes other assets in their portfolio. These funds seldom outperform the stock market in when the market is moving decidedly to the upside. Conversely these funds seldom drop as fast as the market during a crash. These mutual funds have an asset allocation within themselves. Most balanced funds hold somewhere from 30 to 70 percent in stocks and a similar percentage in bonds. Balanced funds can have very good performance records during times where the market has a number of ups and downs. Depending on the fund balanced funds can hold an array of assets ranging from real estate investment trusts to gold to debt in emerging markets.

Balanced funds are a nice alternative to investors who are risk averse. With a balanced fund the investor does not see the values of the stocks in the fund go down as much because the total value of the fund does not change as drastically due to the bond component. They are an attractive for those who do not wish to establish their own asset allocation and manage their own funds. Balanced funds are popular with people in retirement. Still other investors allocate a portion of their portfolio to balanced funds in addition to their normal asset allocation.

The best balanced funds

Leads to more cash for you!
Leads to more cash for you!

The author’s recommendation for balanced funds

Permanent Portfolio symbol PRPFX: This fund has performed very well and is up nearly 10 percent per year over the last ten years. At this time this fund has investments in gold, US treasury bonds, Swiss Franc assets, aggressive stocks and natural resource stocks.

The next fund has a great name and great performance. James Balanced Golden Rainbow Fund symbol GLRBX. This fund invests primarily in United States stocks and bonds. This fund is up over 6 percent per year over the last 10 years. The great feature of this fund is it has a good concentration in bonds most of which are short term. If you are seeking a conservative fund this fund may be the best for you.

Greenspring Fund symbol GRSPX. This fund also invests globally. This fund much like the others listed holds a blend of stocks and bonds. At this time the fund has a fair weighting in convertible bonds. This fund is up a full 8.7 percent per year over the last ten years. Since its inception in 1983 this fund has yielded a handsome 10.17 percent per year. ($1000 on July 1, 1983 is now worth $13,843!)

Oakmark Equity and Income Fund symbol OAKBX. This fund invests globally but tends to invest more heavily in the United States. At this time the fund has a significant weighting in energy and short term United States treasury bonds. This fund is up nearly 10 percent over the past 10 years.

GAMCO Westwood Balanced Fund symbol WEBAX. This fund invests 30 to 70 percent equities and 30 to 70 percent debt securities. Presently this fund has a good portion of its assets in energy. This fund is up just over 4 percent per year over the last 10 years.

Manning and Napier pro blend extended term series symbol MNBAX. This fund tends to stick with United States stocks and bonds but can have an international component. This fund has gained 6.31 percent per year over the past 10 years.

Balanced funds can provide the investor with stable returns. They can provide the investor with nice hands off approach to investing.

For most investors the author recommends the investor develop their own asset allocation and invest in the best funds in those asset classes. Once the investor has their asset allocation select the best small cap, best mid cap, large cap, global, bond, and even concentrated portfolio funds for their portfolio.

Fund Poll

Do you own any balanced funds?

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    • Daddy Paul profile imageAUTHOR

      Daddy Paul 

      7 years ago from Michigan

      cbyersfinance

      You bring up some good points. I would like to point out that none of the funds in this hub lost the kind of money you described. That said many funds including many of the funds outlined in my other hubs did. My point is two fold. Balanced funds are a good alternative for those who want good returns and can handle modest losses. Those that cannot handle modest losses need to be in secure investments such as TIP's or CD's. More importantly those that learn from history know that when the market is down and things look worst it is the time to invest. I did not have cash to invest into the market in March of 2009 so I converted a portion of my traditional IRA money to Roth money. Since then the funds have more than doubled and I paid tax on the value at that time. Further I did not have to pay the tax until 4/15/2010. If one has the means buy low and sell when the market is at highs.

    • profile image

      portugalmortgage 

      7 years ago

      Interesting stuff..

    • profile image

      cbyersfinance 

      7 years ago

      The stock market doesn't always tend to go up... What happened in 2008, when many mutual funds lost 30-50% of there value, robbing most americans of there dreams of retirement?

      The stock market goes up and down, allowing astute investors opportunities no matter which direction it is goingl. However, if invested in mutual funds, you are at the mercy of the market and GAMBLING that what that fund is invested in will go up. Another problem is the lack of transparency with many of these funds.

    • Daddy Paul profile imageAUTHOR

      Daddy Paul 

      8 years ago from Michigan

      forlan

      I am sure you have reason to think that way but the stock market always tends to go up. In 1974 I heard the same comments.

      Balanced funds do very well in times when the market is going up and down.

      The USA does have some problems but I am sure we do not have as many as Indonesia.

    • forlan profile image

      forlan 

      8 years ago

      I am doubt that this investment give high return, considering the crisis.

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