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Balanced funds offer investors the convenience of buying into a single fund rather than holding both equity and bond funds. This category of funds also reduces a portfolio’s volatility while providing higher returns than pure fixed-income investments.

The fund managers also enjoy the flexibility of changing the proportion of equity and fixed-income investments in response to market conditions. An upswing may prompt them to hold a relatively higher share of equity to maximize gains, whereas a downturn will see them shifting loyalties toward fixed-income investments to stem losses.

Below, we share with you three top-ranked balanced mutual funds, viz. Direxion Monthly S&P 500 Bull 1.75X Fund (DXSLX - Free Report), Brown Advisory Flexible Equity Fund Advisor (BAFAX - Free Report), and Calamos Growth & Income Fund Class A (CVTRX - Free Report). Each has a Zacks Mutual Fund Rank #1 (Strong Buy) and is expected to outperform its peers in the future.

Direxion Monthly S&P 500 Bull 1.75X Fund invests most of its assets, along with borrowings, if any, in index and exchange-traded funds (ETF) securities. DXSLX investments generally track float-adjusted index and other financial instruments that provide monthly exposure in the market capitalization-weighted index or ETFs that track the index.

Direxion Monthly S&P 500 Bull 1.75X Fund has three-year annualized returns of 14.4%. As of the end of August 2022, DXSLX had one issue and 53.19% of its net assets invested in Ishares core S&P ETF.

Brown Advisory Flexible Equity Fund Advisor invests most of its net assets, along with borrowings, if any, in a diversified portfolio of equity securities in medium and large market capitalization companies that have strong, or improving, long-term business characteristics. BAFAX advisors may also choose to invest a small portion of its net assets in foreign securities, including emerging markets.

Brown Advisory Flexible Equity Fund Advisor has three-year annualized returns of 8.5%. BAFAX has an expense ratio of 0.93% compared with the category average of 0.99%.

Calamos Growth & Income Fund Class A invests most of its net assets in a portfolio of convertible, equity and fixed-income securities of U.S. companies irrespectove of market capitalization to strike a balance between risk and reward in terms of growth and income. CVTRX advisors generally hold investments in convertible and fixed-income securities for two to 10 years.

Calamos Growth & Income Fund Class A has three-year annualized returns of 9.5%. John P. Calamos has been one of the fund managers of CVTRX since September 1988.

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