Award-winning balanced funds make the grade

Multi-year FundGrade A+® Award winners shine

If the past few months have taught us anything, it is that diversification still plays an important role in investor portfolios. After years of underperformance, the S&P/TSX Composite significantly outperformed its U.S. counterparts over the first four months of 2025. Investors overexposed to the tech heavy U.S. markets would have had a bumpy ride, whereas an allocation to Canada – with its higher exposure to gold and other mining companies – would have improved returns and reduced volatility.

From an asset allocation perspective, rising rates due to stubbornly high inflation led to poor performance and even decreases in bond prices over the past few years. To make matters worse, the correlation between bonds and equities doubled from its historic norm, reducing the diversification benefits fixed income normally delivers. More recently however, rates have fallen and correlations have decreased, which would have improved the risk return-profile of a balanced portfolio.

Balanced mutual funds offer investors varying degrees of asset and geographic diversification in a single product. To find top-performing balanced funds, I started with the Fundata FundGrade A+^® Award winners for 2024. The awards are presented annually and recognize funds that have consistently outperformed their peers on a risk-adjusted basis. Last year, a total of 424 funds received the prestigious award. Of these, 187 were mutual funds, of which 58 were in balanced categories. Drilling down even further, only the following five balanced funds have won an A+ award for at least seven consecutive years. (Note that all performance and fee data are based on the commission-based A series; other series are also available)

Five balanced winners

ATB Investment Management has two funds that made this exclusive list. First, Compass Conservative Balanced Portfolio is in the Canadian Fixed Income Balanced category and launched in 2002. Portfolio managers Robert Armstrong, Steve Xu, and Alex Richards engage with sub advisors to build a portfolio that targets a fixed-income allocation between 60% and 75%. Current holdings sit at 65% fixed income, 34% equity, and 1% cash. The fixed-income holdings are primarily Canadian, while the 34% equity component is 15% International, 11% Canadian, and 8% U.S.. The fund has won an A+ award for 13 consecutive years and is the top ranked fund in the category over 10 years, with a compound return of 4.7%, almost double the category average. The fund is rated low risk and suitable for investors looking for income from their investment. The MER is 1.59%.

The second ATB fund is Compass Conservative Portfolio. Run by the same portfolio managers, this fund targets a slightly higher fixed-income weight of between 70% and 90%. Current holdings include 75% bonds, 20% equity, and 5% cash. This fund has the fourth highest 10-year compound return in the Canadian Fixed Income Balanced category at 4.3% and is one of the least volatile. It has also won the A+ award for 13 years in a row and has an MER 1.3%

CIBC Balanced Index Fund is in the Canadian Neutral Balanced category and started in 1998. The fund uses passive management strategies to approximate the performance of a blended index comprised of 35% fixed income, 35% Canadian equity, 15% U.S. equity, 8% cash, and 7% International equity. The fund has a 10-year compound return of 5.2%, one percentage point above the category average, with lower-than-average volatility. It has won an A+ award for eight consecutive years. It is rated low to medium risk and has an MER 1.21%

Launched in 2007, the VPI Canadian Balanced Pool is managed by Value Partners Investments Inc. Portfolio manager Ken O’Kennedy of Dixon Mitchell Investment Counsel manages the fund with an equity allocation of around 75%, with just over 20% in fixed income. The equity portion is a concentrated portfolio of just 35 holdings, split fairly evenly between Canada and the U.S. Top holdings include names like Visa Inc., Dollarama Inc., and Brookfield Corp. In addition to having a lower-than-average standard deviation, this fund has the fourth-highest 10-year compound return amongst its peers at 7.3%, well above the Canadian Equity Balanced category average of 4.9%. 2024 marked its seventh consecutive A+ award. The fund is rated low to medium risk, and the MER is 1.96% with a minimum investment of $25,000.

Dynamic U.S. Balanced Class started in 2011 and is in the Global Equity Balanced category. Portfolio Managers Vishal Patel and Domenic Bellissimo have a concentrated, yet diversified portfolio invested primarily in the U.S. market. Current allocations are 69% equity, 30% bonds, and 1% cash. The fund has a 10-year compound return of 8.7%, which is 3.5 percentage points higher than the category average. And although it has higher-than-average volatility compared with its peers, it has won an A+ award for seven consecutive years. The fund is rated low to medium risk and has an MER of 2.2%.

Brian Bridger, CFA, FRM, is Senior Vice President, Analytics & Data, at Fundata Canada Inc. and is a member of the Canadian Investment Funds Standards Committee.

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Commissions, trailing commissions, management fees and expenses all may be associated with mutual fund investments. Please read the simplified prospectus before investing. Mutual funds are not guaranteed and are not covered by the Canada Deposit Insurance Corporation or by any other government deposit insurer. There can be no assurances that the fund will be able to maintain its net asset value per security at a constant amount or that the full amount of your investment in the fund will be returned to you. Fund values change frequently and past performance may not be repeated. The foregoing is for general information purposes only and is the opinion of the writer. No guarantee of performance is made or implied. This information is not intended to provide specific personalized advice including, without limitation, investment, financial, legal, accounting or tax advice.