Is Fidelity Balanced Fund (FBALX) a Strong Mutual Fund Pick Right Now?

Having trouble finding an Allocation Balanced fund? Fidelity Balanced Fund (FBALX) is a potential starting point. FBALX carries a Zacks Mutual Fund Rank of 1 (Strong Buy), which is based on various forecasting factors like size, cost, and past performance.

FBALX 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.

Fidelity is responsible for FBALX, and the company is based out of Boston, MA. The Fidelity Balanced Fund made its debut in November of 1986 and FBALX has managed to accumulate roughly $39.50 billion in assets, as of the most recently available information. The fund’s current manager is a team of investment professionals.

Investors naturally seek funds with strong performance. This fund has delivered a 5-year annualized total return of 11.05%, and is in the top third among its category peers. But if you are looking for a shorter time frame, it is also worth looking at its 3-year annualized total return of 7.24%, which places it in the top third during this time-frame.

It is important to note that the product’s returns may not reflect all its expenses. Any fees not reflected would lower the returns. Total returns do not reflect the fund’s [%] sale charge. If sales charges were included, total returns would have been lower.

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. FBALX’s standard deviation over the past three years is 13.34% compared to the category average of 13.33%. Looking at the past 5 years, the fund’s standard deviation is 14.28% compared to the category average of 14.15%. This makes the fund more volatile than its peers over the past half-decade.

Investors should note that the fund has a 5-year beta of 0.78, so it is likely going to be less volatile than the market at large. Because alpha represents a portfolio’s performance on a risk-adjusted basis relative to a benchmark, which is the S&P 500 in this case, one should pay attention to this metric as well. FBALX has generated a negative alpha over the past five years of -1.27, demonstrating that managers in this portfolio find it difficult to pick securities that generate better-than-benchmark returns.

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