Zacks Names Top-Ranked Balanced Mutual Funds for Amazing Returns

Investors seeking exposure to both equity and fixed-income securities may consider balanced mutual funds. These funds offer greater returns than pure, fixed-income investments while maintaining a low volatility level.

The proportion of equity and fixed-income investments in these funds can vary in response to market conditions. Managers may increase the share of fixed-income securities during a downturn to avoid losses, while raising the share of equity securities in a bullish market.

Three top-ranked balanced mutual funds are Permanent Portfolio Permanent (PRPFX), American Funds American Balanced (ABALX), and Vanguard Wellington Investor (VWELX). Each has earned a Zacks Mutual Fund Rank #1 (Strong Buy) and is expected to outperform its peers in the future.

Permanent Portfolio Permanent distributes its holdings across various asset classes, including gold, silver, Swiss franc-denominated investments, real estate, and natural resource stocks. It maintains a concentrated portfolio and is considered non-diversified. The fund has three-year annualized returns of 19.1% as of January 2026.

American Funds American Balanced pursues a balanced approach by investing in U.S. stocks, investment-grade bonds, and government-backed securities. It may also hold dividend-paying equities, bonds, and other securities from foreign issuers to enhance diversification and income potential. The fund has an expense ratio of 0.55%.

Vanguard Wellington Investor primarily invests in dividend-paying stocks of well-established large companies, complemented by holdings in fixed-income securities such as investment-grade corporate bonds, U.S. government and agency obligations, and mortgage-backed securities to provide stability and moderate current income. The fund has three-year annualized returns of 14.8%.