Buy These 3 Top-Ranked Balanced Mutual Funds for Mitigating Risk

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. Davis Appreciation And Income Fund RPFCX, Fidelity Balanced Fund FBALX and State Farm Balanced Fund STFBX. 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.

Davis Appreciation And Income Fund invests most of its net assets in a balanced portfolio of common stock, convertible securities, preferred stock and bonds. RPFCX advisors may invest in securities issued by either domestic or foreign companies, irrespective of their market capitalization.

Davis Appreciation And Income Fund has three-year annualized returns of 18.2%. As of the end of September 2025, RPFCX had 32 issues with 6.5% of its net assets invested in Berkshire Hathaway.

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 15.9%. FBALX has an expense ratio of 0.46%.

State Farm Balanced Fund invests most of its net assets in equity securities of preferably large and medium-cap companies. STFBX advisors consider large and medium-cap companies as defined by S&P Dow Jones Indices at the time of investment.

State Farm Balanced Fund has three-year annualized returns of 14.4%. Christine Tinker has been one of the fund managers of STFBX since March 2021.

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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This article originally published on Zacks Investment Research (zacks.com).

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