Investors seeking a middle ground between safety and growth often turn to moderate-risk mutual funds. These funds strike a balance by investing in a mix of stocks and bonds, offering steady returns without the extreme volatility of high-risk investments.
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What Are Moderate-Risk Mutual Funds?
Moderate-risk mutual funds typically follow a 60/40 or 70/30 split between stocks and bonds. This balanced approach aims to:
✅ Generate steady growth through equity exposure
✅ Reduce volatility with fixed-income investments
✅ Provide income through dividends and bond yields
Key Metrics I Used to Evaluate These Funds:
- Asset Allocation – Stock/bond mix (e.g., 60% stocks, 40% bonds)
- Expense Ratio – Annual fees (lower is better)
- 5-Year & 10-Year Returns – Historical performance consistency
- Sharpe Ratio – Risk-adjusted returns (higher = better)
- Drawdown Risk – Worst historical loss during market downturns
10 Best Moderate-Risk Mutual Funds in 2024
1. Vanguard Balanced Index Fund (VBIAX)
- Asset Allocation: 60% U.S. Stocks / 40% U.S. Bonds
- Expense Ratio: 0.07%
- 5-Year Return: 8.9%
- 10-Year Return: 9.2%
- Sharpe Ratio: 0.88
- Drawdown (2022): -16.3%
Why I Like It: VBIAX is a low-cost, passive fund that mirrors the U.S. stock and bond markets. Ideal for hands-off investors.
2. Fidelity Balanced Fund (FBALX)
- Asset Allocation: 65% Stocks / 35% Bonds
- Expense Ratio: 0.51%
- 5-Year Return: 9.1%
- 10-Year Return: 9.4%
- Sharpe Ratio: 0.90
- Drawdown (2022): -15.8%
Why I Like It: FBALX actively adjusts its stock/bond mix, outperforming many peers over the long term.
3. T. Rowe Price Personal Strategy Balanced Fund (TRPBX)
- Asset Allocation: 60% Stocks / 30% Bonds / 10% Cash
- Expense Ratio: 0.68%
- 5-Year Return: 8.7%
- 10-Year Return: 9.0%
- Sharpe Ratio: 0.86
- Drawdown (2022): -17.1%
Why I Like It: TRPBX diversifies globally, including international stocks and bonds for added stability.
4. American Funds American Balanced Fund (ABALX)
- Asset Allocation: 55% Stocks / 40% Bonds / 5% Cash
- Expense Ratio: 0.57%
- 5-Year Return: 9.3%
- 10-Year Return: 9.5%
- Sharpe Ratio: 0.92
- Drawdown (2022): -14.9%
Why I Like It: ABALX focuses on dividend-paying blue-chip stocks and high-quality bonds, minimizing downside risk.
5. Dodge & Cox Balanced Fund (DODBX)
- Asset Allocation: 65% Stocks / 30% Bonds / 5% Cash
- Expense Ratio: 0.53%
- 5-Year Return: 9.5%
- 10-Year Return: 9.7%
- Sharpe Ratio: 0.94
- Drawdown (2022): -16.5%
Why I Like It: DODBX uses a value-investing approach, buying undervalued stocks and corporate bonds.
6. Vanguard Wellington Fund (VWELX)
- Asset Allocation: 65% Stocks / 35% Bonds
- Expense Ratio: 0.24%
- 5-Year Return: 8.8%
- 10-Year Return: 9.1%
- Sharpe Ratio: 0.89
- Drawdown (2022): -15.2%
Why I Like It: One of the oldest balanced funds (since 1929), VWELX has a proven track record through multiple market cycles.
7. Fidelity Puritan Fund (FPURX)
- Asset Allocation: 70% Stocks / 30% Bonds
- Expense Ratio: 0.51%
- 5-Year Return: 9.7%
- 10-Year Return: 9.9%
- Sharpe Ratio: 0.96
- Drawdown (2022): -17.4%
Why I Like It: FPURX leans slightly more aggressive (70% stocks) but has consistently beaten its benchmark.
8. Schwab Balanced Fund (SWOBX)
- Asset Allocation: 60% Stocks / 40% Bonds
- Expense Ratio: 0.52%
- 5-Year Return: 8.5%
- 10-Year Return: 8.8%
- Sharpe Ratio: 0.85
- Drawdown (2022): -16.0%
Why I Like It: SWOBX is a solid, low-minimum ($1) option for new investors.
9. BlackRock Balanced Advantage Fund (MALOX)
- Asset Allocation: 50-70% Stocks / 30-50% Bonds (dynamic)
- Expense Ratio: 0.87%
- 5-Year Return: 9.0%
- 10-Year Return: 9.3%
- Sharpe Ratio: 0.91
- Drawdown (2022): -14.5%
Why I Like It: MALOX automatically adjusts its stock/bond mix based on market conditions.
10. JPMorgan SmartRetirement Blend 2030 Fund (JSMIX)
- Asset Allocation: 65% Stocks / 35% Bonds (glides to 50/50 by 2030)
- Expense Ratio: 0.57%
- 5-Year Return: 8.4%
- 10-Year Return: 8.6%
- Sharpe Ratio: 0.84
- Drawdown (2022): -15.7%
Why I Like It: A target-date fund that gradually becomes more conservative—ideal for retirement savers.
Comparison Table: Best Moderate-Risk Mutual Funds
| Fund Name | Stock/Bond Split | Expense Ratio | 5-Year Return | Sharpe Ratio | Best For |
|---|---|---|---|---|---|
| VBIAX | 60/40 | 0.07% | 8.9% | 0.88 | Passive investors |
| FBALX | 65/35 | 0.51% | 9.1% | 0.90 | Active management |
| TRPBX | 60/30/10 | 0.68% | 8.7% | 0.86 | Global diversification |
| ABALX | 55/40/5 | 0.57% | 9.3% | 0.92 | Dividend income |
| DODBX | 65/30/5 | 0.53% | 9.5% | 0.94 | Value investing |
| VWELX | 65/35 | 0.24% | 8.8% | 0.89 | Long-term stability |
| FPURX | 70/30 | 0.51% | 9.7% | 0.96 | Slightly aggressive growth |
| SWOBX | 60/40 | 0.52% | 8.5% | 0.85 | Beginners |
| MALOX | 50-70/30-50 | 0.87% | 9.0% | 0.91 | Automatic rebalancing |
| JSMIX | 65/35 (gliding) | 0.57% | 8.4% | 0.84 | Retirement planning |
How to Choose the Right Moderate-Risk Fund
- For Hands-Off Investors: VBIAX or VWELX (low-cost, set-it-and-forget-it).
- For Active Management: FBALX or DODBX (professional stock/bond selection).
- For Retirement: JSMIX (automatically adjusts risk as you near retirement).
- For Global Exposure: TRPBX (includes international markets).
Final Thoughts
Moderate-risk mutual funds are ideal for investors who want growth without stomach-churning volatility. My top recommendations:
- Best Overall: Vanguard Balanced Index (VBIAX) – Ultra-low fees, solid returns.
- Best for Active Management: Dodge & Cox Balanced (DODBX) – Strong value focus.
- Best for Retirement: JPMorgan SmartRetirement 2030 (JSMIX) – “Set it and forget it” simplicity.
Would you like help matching a fund to your specific risk tolerance? Let me know in the comments!
