For those seeking both capital appreciation and a steady income flow from a secure investment, balanced funds could be the best possible choice. These funds ensure that gains from the stock market are accompanied with relatively low levels of volatility by combining the benefits of both stocks and bonds. This helps them to harness the benefits of a market upswing while protecting capital during tough periods. The better funds in this category keep the proportion of equity, debt and money market instruments flexible to further enhance these unique benefits. Below we will share with you 5 top rated balanced funds. Each has earned a Zacks #1 Rank (Strong Buy) as we expect the fund to outperform its peers in the future. To view the Zacks Rank and past performance of all balanced funds, then click here . T. Rowe Price Personal Strategy Balanced (TRPBX) seeks high total return with and equal emphasis on capital appreciation and current income. It invests in a diversified portfolio which usually consists of 60% equity, 30% bonds and 10% money market securities The fund has a ten year annualized return of 5.05%. The fund has an expense ratio of 0.76% compared to a category average of 1.02%. Alpine Dynamic Balance (ADBYX) invests in a mix of large cap domestic stocks and fixed income securities of superior quality. It may utilize up to 75% of its assets to purchase fixed-income securities. It seeks capital growth with income as a secondary objective. The fund returned 42.57% over the last one year period. The fund manager is Samuel A. Lieber and he has managed this balanced fund since 2001. J Hancock Balanced A ( SVBAX) seeks current income and capital appreciation over the long term. It invests in a wide range of equity and debt securities. At least 25% of its assets are invested in equity securities and not more than 25% is used to purchase senior debt securities. The fund has a five year annualized return of 7.88%. The fund has an expense ratio of 1.21% compared to a category average of 1.02%. Wells Fargo Advantage Growth Balanced ( NVGBX) invests in both equity master and fixed-income portfolios, concentrating on equity portfolios. It utilizes 65% of its assets to purchase equities and 35% to purchase assets in debt securities. The fund returned 46.85% in the last one year period. As of September 2009, this balanced fund held 3411 issues, with 14.78% of its total assets invested in S&P 500 FUTURES DEC09. Value Line Income & Growth (VALIX) seeks income with capital appreciation as a secondary objective. Not less than 50% of its assets are used to purchase common or preferred stock and convertible securities. Up to 50% of its assets are invested in government securities, investment grade debt and money market securities. This balanced fund returned 33.79% over the last one year period and has a ten year annualized return of 4.19%. Bradley Brooks is the fund manager and has managed this balanced fund since 2002. To view the Zacks Rank and past performance of all balanced funds, then click here. About Zacks Mutual Fund Rank By applying the Zacks Rank to mutual funds, investors can find funds that not only outpaced the market in the past but are also expected to outperform going forward. Learn more about the Zacks Mutual Fund Rank at http://www.zacks.com/funds/mutualfund/ Zacks Investment Research