By creating a diversified portfolio of both stocks and bonds, balanced funds ensure that they harness the inherent strengths of both classes of instruments. Most of the competently managed funds in this category keep the proportion of assets invested in different asset classes flexible and make adjustments in keeping with prevailing market conditions. This ensures that fixed-income securities protect the portfolio from losses during a downturn while equity securities harness maximum gains from a rising market.

Below we will share with you the 5 highest yielding Zacks #1 ranked balanced mutual funds. Each has earned a Zacks #1 Rank (Strong Buy) as we expect these mutual funds to outperform their 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.

Mutual Fund

Yield

JPMorgan Income Builder A

4.72%

MFS Diversified Income A

3.08%

Mairs & Power Balanced

2.47%

Vanguard Tax-Managed Balanced

2.21%

Davis Appreciation & Income A

1.7%
 
JPMorgan Income Builder A (JNBAX) seeks high income levels while also looking to appreciate the capital invested. The fund invests in a wide variety of domestic and foreign debt and equity securities. It may invest in both mature and emerging economies. The balanced mutual fund returned 20.21% over the last one year period.

The balanced mutual fund has an expense ratio of 0.74% compared to a category average of 0.91%.

MFS Diversified Income A (DIFAX) invests in common stock and preferred stock, bonds as well as cash. The fund focuses on investing in domestic firms, but may also invest in foreign companies. It selects common stock issued by growth oriented companies, regardless of their size. The balanced mutual fund returned 19.66% over the last one year period.

The Fund Manager is James T. Swanson and he has managed this balanced mutual fund since 2006.

Mairs & Power Balanced (MAPOX) seeks regular current income. The fund focuses on acquiring common stock, related convertible securities as well as fixed-income securities. The fund focuses on acquiring investment grade fixed-income securities with higher ratings. It may also invest in convertible and non-convertible securities with lower ratings. The balanced mutual fund returned 24.64% in the last one year period.

As of June 2012, this balanced mutual fund held 201 issues, with 2.91% of its total assets invested in 3M Co.

Vanguard Tax-Managed Balanced (VTMFX) invests 50 to 55% of its assets in municipal securities and the remainder in common stock. The fixed-income component of its portfolio is primarily composed of municipal securities of high quality. The balanced mutual fund returned 17.85% in the last one year period.

The balanced mutual fund has an expense ratio of 0.12% compared to a category average of 0.91%.

Davis Appreciation & Income A (RPFCX) seeks both growth and income. The fund invests in common stock and preferred stock, bonds as well as cash. The fund focuses on investing in domestic firms, but may also invest in foreign companies. It selects common stock issued by growth oriented companies, regardless of their size. The balanced mutual fund returned 14.54% in the last one year period.

The Fund Manager is Andrew Adams Davis and he has managed this balanced mutual fund since 1993.

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. Learn more about the Zacks Mutual Fund Rank at http://www.zacks.com/funds.


 
(DIFAX): ETF Research Reports
 
(JNBAX): ETF Research Reports
 
(MAPOX): ETF Research Reports
 
(RPFCX): ETF Research Reports
 
(VTMFX): ETF Research Reports
 
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Zacks Investment Research