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Balancing Act

Funds that combine the best of both worlds

There's something sweet about balanced funds. For one thing, they make picking easy: When you can't decide whether a stock or a bond fund is better for you, they fit the bill perfectly by offering both wrapped up in one convenient package.

The Oakmark Equity & Income fund (OAKBX), around since 1995, is a value fund managed by Clyde McGregor since its inception. According to Lipper Inc., this balance fund is among the top performing funds over the past one-year and five-year periods. So far, it has a No. 1 Lipper leader rating in both consistent return and preservation of capital categories.

With at least 50 percent of its assets invested in stocks and at least 25 percent in Treasuries, the fund's got enough leeway to pick up performance juice and, at the same time, keep itself grounded, thanks to its high-quality, fixed-income holdings.

"This fund will look at anything on the stock side, from the occasional micro-cap to the very large-cap," says McGregor, "and on the bond side, everything from Treasuries to nonrated issues."

The fund isn't kicking off the income it once did, but that's because finding high-yield bonds hasn't been easy-and McGregor is very picky about any high-yield securities he adds. But the Oakmark Equity & Income fund is still a solid performer and worth looking at when it's balance you seek.


Dian Vujovich is an author, syndicated columnist and publisher of mutual fund investing site www.allaboutfunds.com.

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This article was originally published in the July 2002 print edition of Entrepreneur with the headline: Balancing Act.

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