First, we select the top trending category from more than 200 categories listed on MutualFunds.com based on the percentage increase in monthly viewership. Then, we choose the top three funds with the highest one-year trailing total returns from the top trending category. To ensure funds’ quality and staying power, we only look at those mutual funds with a minimum of $100 million in assets and a track record of at least three years. We also remove those mutual funds closed to new investors and unavailable for investment outside registered accounts such as retirement or 529.
In this edition, we look closely at trending Balanced Allocation Funds for investors.
Balanced allocation funds, sometimes known as multi-asset funds, provide investors with a balanced portfolio of stocks and bonds in a single mutual fund. While they historically have a 70% stock and 30% bond allocation, modern funds offer various asset allocations to maximize total return and/or income. But, unlike lifecycle funds, they don’t change their allocation based on an investor’s age or goals.
Be sure to check out the Balanced Allocation Funds page to find out more about the other funds in this category as well.
The Franklin Income Fund (FKINX) comes in first place on this week’s list with a -2.23% trailing 12-month return. With a 0.62% expense ratio and 4.97% trailing yield, the fund is the cheapest and best-performing fund on the list.
The fund seeks to maximize income while maintaining prospects for capital appreciation by investing in a diversified portfolio. In particular, the fund managers follow a flexible, value-oriented investment philosophy seeking income and long-term capital appreciation by investing in dividend stocks, convertible securities, and bonds.
The fund’s portfolio consists of nearly 600 securities, including 51.36% fixed-income securities, 25.69% equity securities, 20.70% convertible securities and equity-linked notes, and 2.25% cash and equivalents. The largest issuers include the U.S. government (12.09%), healthcare equipment and services (2.84%), and pharmaceutical firms (2.57%).
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2. MainStay Balanced Fund (MBNAX)
The MainStay Balanced Fund (MBNAX) comes in second place with a -3.02% trailing 12-month return. With a 1.07% expense ratio and a 0.84% trailing yield, the fund is the lowest yielding option on the list.
The fund seeks total return by investing in a broad, diversified portfolio that allocates assets between stocks for capital appreciation and fixed-income securities for interest potential. Stock selection is driven by a fundamental, bottom-up, core value strategy, while the fixed income portion leverages a duration-neutral, relative value approach.
The fund’s portfolio consists of 60.2% common stock, 18.8% government and agency securities, 8% corporate bonds, 5% cash and other assets, 5% equity ETFs, 1.3% asset-backed securities, 1% foreign corporate bonds, 0.4% CMOs, and 0.3% fixed income ETFs. The largest issuers include the U.S. government and financial institutions.
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3. Delaware Wealth Builder Fund (DDIAX)
The Delaware Wealth Builder Fund (DDIAX) comes in third place with a -4.99% trailing 12-month return. With a 1.08% expense ratio and a 1.63% trailing yield, the fund is the most expensive fund on the list.
The fund seeks total return with flexible exposure to securities throughout the capital structure, offering the potential for capital growth and current income. In addition, the portfolio aims to provide diversification among different asset classes and geographies consistent with moderate investment risk tolerance.
The fund’s portfolio includes 700 securities, including 29.1% U.S. quality and income equity, 16.3% large-cap value stocks, 14% investment-grade bonds, 11.1% opportunistic, 9.8% convertible securities, 5.7% high-yield securities, 4.1% international equities, 4% cash and equivalents, 3% REITs, and 3% international fixed income.
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The Bottom Line
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NOTE: Trailing 1-year total returns as of September 8, 2022.