Any investors hoping to find an Allocation Balanced fund could think about starting with American Funds Balanced F1 (BALFX). BALFX holds a Zacks Mutual Fund Rank of 1 (Strong Buy), which is based on nine forecasting factors like size, cost, and past performance.
BALFX is classified in the Allocation Balanced segment by Zacks, which is an area full of possibilities. Here, investors are able to get a good head start with diversified mutual funds, and play around with core holding options for a portfolio of funds. Allocation Balanced funds look to invest across a balance of asset types, like stocks, bonds, and cash, though including precious metals or commodities is not unusual; these funds are mostly categorized by their respective asset allocation.
History of Fund/Manager
American Funds is responsible for BALFX, and the company is based out of Los Angeles, CA. Since American Funds Balanced F1 made its debut in July of 1975, BALFX has garnered more than $5.47 billion in assets. The fund is currently managed by a team of investment professionals.
Investors naturally seek funds with strong performance. This fund carries a 5-year annualized total return of 10.62%, and it sits in the middle third among its category peers. Investors who prefer analyzing shorter time frames should look at its 3-year annualized total return of 9.05%, which places it in the middle third during this time-frame.
When looking at a fund’s performance, it is also important to note the standard deviation of the returns. The lower the standard deviation, the less volatility the fund experiences. Compared to the category average of 14.77%, the standard deviation of BALFX over the past three years is 10.68%. Looking at the past 5 years, the fund’s standard deviation is 8.81% compared to the category average of 12.42%. This makes the fund less volatile than its peers over the past half-decade.
Investors should note that the fund has a 5-year beta of 0.57, so it is likely going to be less volatile than the market at large. Another factor to consider is alpha, as it reflects a portfolio’s performance on a risk-adjusted basis relative to a benchmark-in this case, the S&P 500. Over the past 5 years, the fund has a positive alpha of 0.47. This means that managers in this portfolio are skilled in picking securities that generate better-than-benchmark returns.
For investors, taking a closer look at cost-related metrics is key, since costs are increasingly important for mutual fund investing. Competition is heating up in this space, and a lower cost product will likely outperform its otherwise identical counterpart, all things being equal. In terms of fees, BALFX is a no load fund. It has an expense ratio of 0.62% compared to the category average of 0.89%. BALFX is actually cheaper than its peers when you consider factors like cost.
Investors need to be aware that with this product, the minimum initial investment is $250; each subsequent investment needs to be at least $50.
Overall, American Funds Balanced F1 ( BALFX ) has a high Zacks Mutual Fund rank, and in conjunction with its comparatively similar performance, average downside risk, and lower fees, American Funds Balanced F1 ( BALFX ) looks like a good potential choice for investors right now.
Want even more information about BALFX? Then go over to Zacks.com and check out our mutual fund comparison tool, and all of the other great features that we have to help you with your mutual fund analysis for additional information. For analysis of the rest of your portfolio, make sure to visit Zacks.com for our full suite of tools which will help you investigate all of your stocks and funds in one place.
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