of their portfolios also ensures that the capital invested is protected during a market downturn. Moreover, many funds in this category keep the relative shares of equity, debt and money market instruments fluid to enable them to respond to changing market conditions.

Below we will share with you 5 top rated balanced mutual funds. Each has earned a Zacks #1 Rank (Strong Buy) as we expect the fund to outperform its peers in the future. To view the Zacks Rank and past performance of all balanced funds, then click here.

Mairs & Power Balanced (NASDAQ:MAPOX - News) seeks to provide current income which is at least 25% greater than that of the S&P 500 index. The fund focuses on acquiring common stock, related convertible securities as well as fixed-income securities. The fixed-income securities selected are usually rated relatively higher. The balanced mutual fund has a ten year annualized return of 5.95%.

The balanced mutual fund has a minimum initial investment of $2,500 and an expense ratio of 0.81% compared to a category average of 0.99%.

AllianceBernstein Balanced Shares A (CABNX) invests in a wide range of equity and debt instruments. Between 60% to 75% of its assets are utilized to purchase stocks. Debt securities comprise 40% to 60% of its investments. The balanced mutual fund has a three year annualized return of 13.81%.

The Fund Manager is Frank Caruso and he has managed this balanced mutual fund since 2007.

Transamerica Multi-Managed Balanced A (NASDAQ:IBALX - News) seeks capital appreciation with the secondary objective of current income. Common stocks constitute the majority of the fund’s investments. The remainder of its assets is utilized to purchase high quality bonds with maturity periods not exceeding 30 years. This balanced mutual fund returned 7.14% in the last one year period.

The balanced mutual fund has a minimum initial investment of $1,000 and an expense ratio of 1.56% compared to a category average of 0.99%.

Rainier Balanced Original (NASDAQ:RIMBX - News) invests in a wide range of domestic common stocks, investment grade bonds and cash equivalent instruments. Not more than 25% of its assets may be utilized to purchase foreign securities. The balanced mutual fund has a ten year annualized return of 3.58%.

As of September 2011, this balanced mutual fund held 156 issues, with 2.98% of its total assets invested in Apple Inc.

American Century Balanced (NASDAQ:TWBIX - News) seeks both capital growth and current income. Around 60% of the fund’s assets are utilized to purchase equity securities and the balance is used to acquire fixed income instruments. The balanced mutual fund returned 7.94% in the last one year period.

The Fund Manager is Robert Gahagan and he has managed this balanced mutual fund since 2005.

To view the Zacks Rank and past performance of all balanced mutual funds, then click here.

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.

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• Read the analyst report on MAPOX,CABNX,IBALX,RIMBX,TWBIX