fidelity balanced fund vs puritan fund (FBALX vs FPURX)

[okiedokie]

I should start with saying that I know they are not ideal bogle being that they are actively managed. but they seem to have a good track record lasting multiple decades, and I like that it has a fixed range for stocks and bonds unlike target date funds which for my preference are too aggressive then get too conservative for my liking.

I have a target date fund with my 401k but my roth I like the balanced strategy in case god forbid I needed access to the money right when the market decides to tank. say I get a serious medical issue or some other serious event long before I planned to retire, that exhausted my emergency fund) I could then tap into my roth without penalty for my contributions. at least. I hope I never need that but I like having the option.

Fidelity doesn't have an index version of a balanced fund that I could find. and the fees though higher than an index fund aren't outrageously so, in my opinion. and I like the easy one stop, throw my money in and done. all the rebalancing and such done for me.

so between these funds I am curious which is the better choice. I know they are different because otherwise, why would fidelity have two funds that did exactly the same thing, and they do differ in performance. for instance in the 2008 crash the puritan fund held up better, but the past 10 years saw the balanced fund edge out slightly higher.

I need to distinguish between what is pure luck, the kind of thing that would make a person foolishly invest in ARKK because it did better over the past ten years, vs being a better strategy.

from what I can gather the puritan fund focuses more on large cap us stocks and the balanced fund adds more mid and small cap, and the balanced fund has more high quality bonds vs the puritan having more junk bonds. I could be wrong on that but that's what I read.

I think they also may differ in manager style. balanced has a team vs puritan I'm not sure as it doesn't seem as clear.

from what I can tell historically the puritan has done better, including managing downside risk such as in 2008, but given us large caps huge run may be likely to underperform going forward which may tip the scales in favor of the balanced fund doing better with its mid and small caps. its also possible the puritan if managed by only one guy (I'm not sure how they are managed) was just lucky in 2008 vs the team at the balanced fund then and would mean management risk could play a role. less so with balanced since they have a team that I assume could check each others biases and whatever.

if anybody here is knowledgeable on this stuff and could explain to me how these funds differ and the pros and cons for why you would pick one or the other, please let me know. Thanks for the help! on the surface they seem the same. same fees, same balance of 30-40% bonds, but they do differ some and perform differently. Thanks for the help!

[retired@50]

... on the surface they seem the same. same fees, same balance of 30-40% bonds, but they do differ some and perform differently. Thanks for the help!

I'm not seeing much difference, at least not enough to matter.

Since the Balanced fund started in 1986 and Puritan started in 1947, we can do a side by side comparison since 1986. While there are some minor fluctuations, I'm having trouble imagining that one of these funds would lead to a substantially different result than the other. If you've saved enough money, then I think either fund would allow you the same standard of living during your retirement. See image below.



Regards,

[Wiggums]

Not much difference between the funds.

https://finance.yahoo.com/news/balanced ... 00950.html

[okiedokie]

Thanks for the replies. I agree with both of you. there's not much difference. and overall either one should suit my preferences. but there is a difference. even if its just a tiny bit. I want to fully understand what that is. puritan has performed a bit better, but I like that the balanced fund seems more diversified, both in having more than one manager and more than just large cap stocks. my guess is the balanced fund is likely to outperform in the future but who knows. but the fact that they are so similar is what is making it so hard for me to suss out what the differences are and how relevant those differences may or may not be.

[tibbitts]

I own some Fidelity active funds. Without getting into the active/index debate, my suggestion is that if you want active, get several active funds. What you're really hoping for is .1% or .2% extra return, or a little less volatility, or some combination vs. an index fund. And it's just a hope. So you divide your money into a bunch of active funds and hope for the best. You don't buy so many funds (hundreds) that you end up with a true index fund at a higher price, but enough that you end up with sorta-close to an index fund but maybe just slightly tweaked. So you win or lose by some small amount and don't wreck your life because you chose wrong and some renegade fund manager ran off the rails.

So of course buy Puritan. And Balanced. Mix in some Capital and Income, if you can avoid choking on the expense ratio. Maybe add in a little Convertible Securities, Floating Rate and a couple of the pure equity funds.

[okiedokie]

what I like about these two (FBALX and FPURX) is that they are a one stop shop. gets me a balanced stocks and bond portfolio in one fund. easy peasy. toss in money and done. if I was going to do more than one fund in my portfolio, then rebalance between them and collect and redirect dividends and such, I'd do just go with VTI and BND. maybe also VXUS and VGSH if I want to be more complicated. I could then also add a little bit of some active finds too like the contrafund (FCNTX) on the gamble that maybe they beat the market. sometimes they do sometimes they don't.

but I want simplicity. so I've dialed it down to FBALX or FPURX for my one and only holding in my roth. and my 401k is in a target date fund. but because these funds are so similar I can't really figure out what relevant differences there are between them. I almost wonder why fidelity even offers both. it would be like mcdonald offering a double quarter pounder with cheese or a half pounder with cheese. like why? LOL but there is a difference. they perform almost identical but not identical. so the question becomes, what is the cause of the difference in performance? is it luck or does one have a slightly better strategy? if its luck then it truly doesn't matter which. if its strategy, then I'd like to pick the better one even if its only a bit better and both are good. then just stay with that fund forever. that is unless fidelity ever offers a balanced index fund. then I'd switch to that. not willing to switch brokers for one though. I like fidelity.

[retired@50]

... puritan has performed a bit better,...

Over what time period?

According to the chart I posted earlier, the balanced fund had a slight lead from 1986 to date.

Regards,

[FellsGuy]

I like and own Puritan because it’s the oldest of the two not very scientific I have also held contra for 30 years. Who knows what the future holds and with enough assets and modest spending it won’t matter I guess. You could split you assets between the two. It’s like Wellington v Wellesley at Vanguard which I think are similar results over time.
All four are quality time tested funds but for some bogleheads those fees will give them fits.
How about FXAIX and FXNAX 60/40 and call it a day?

[okiedokie]

over what time period is a good question. over some the balanced did better over others the puritan. why that is I don't know. could be luck could be how they invest. if I had to predict I'd guess balanced will do better over the next 10 years as large cap us stocks likely revert to the mean after a huge run. balanced funds with more small and mid caps will likely do better. but who knows. as for FXAIX and FXNAX, that's basically VTI (or really VOO in this case) and BND but with fidelities house funds. I haven't ruled that out as a never do. like when I retire and the math is as simple is which one did better so withdraw from that one this year, sure. while contributing each paycheck? not so much. sounds like too much math for me. every two weeks having to figure out what percent of my contribution to go into stocks and what goes into bonds this week to keep the balance between stocks and bonds right. and then doing likewise with dividends and then again when to rebalance when there's a big swing. nah, too much work for me. I'm lazy. LOL what I like about the balanced fund and its almost identical twin is there is no math to do. just plop my bi-weekly contribution in and done. and I have fidelity set to automatically reinvest dividends and capital gains. rebalancing and such is all done for me. that's what made me opt for this over even a two fund index style. I tried to find a balanced fund that used index style investing but apparently fidelity doesn't offer that right now. so I figured since these active funds have been around for a very long time with proven track records they would do nicely. for now I'm with the balanced fund but wondering what I might be missing with the other one and if I made the right choice. given their similar performance probably doesn't matter that much but I can't help but wonder what makes the funds different enough for fidelity to offer both and if there's a reason that's relevant enough for me to consider it.

[FellsGuy]

Well there is AOR which is cheap and index I believe

[maj]

I have the 'impression' that Balanced is more traditional in its allocation, thus providing a customary all-in-one portfolio.

Puritan seems to have a broader mandate to provide an income focused balanced fund and is perhaps considered a bit more risky than Balanced.

Either fund provides you professional balanced fund management. If you want to avoid buyer's regret, invest in both.

peace

[okiedokie]

ideally I only want one fund but in this one instance investing in both could work. no need to rebalance or do any math. just split the difference. if I'm dropping in 500, do 250 in each and done. no further math needed. I do wish it was more clear though what relevant differences there is. for example if I was comparing two target date funds, I would know that one would be more conservative or become so sooner being further on the glide path. or that one was index and the oher was actively managed. with these two its like one is a double quarter pounder with cheese, and the other is a cheese burger with two 4 oz patties. I think the puritan is managed by one guy though which for me makes it higher risk (management risk) vs a team of the balanced fund. that and the balanced fund is more diversified with mid and small caps. (if what I read is correct and I took the right points from what I read) so for now I'm in the balanced fund, looking over at the other wondering what if. LOL also watching this AOR fund mentioned too now in case I decide to go for it.

[SamGem]

is one better from a tax perspective? and are you investing in a Roth or a taxable brokerage account?

i have FBALX in fidelity Roth but the fidelity advisor suggested it is better to put this in taxable account. i cant recall the reason for it.

[okiedokie]

its in a roth so thankfully taxes are moot.

[rkhusky]

One of the best indicators for future outperformance for similar funds is a low expense ratio. It’s a better predictor than past performance.

So, if I am comparing two similar funds, one with ER of 0.05% and the other with 0.50%, I will take the former every time. If it’s 0.05% vs 0.10%, then it’s a dice roll.

[GaryA505]

is one better from a tax perspective? and are you investing in a Roth or a taxable brokerage account?

i have FBALX in fidelity Roth but the fidelity advisor suggested it is better to put this in taxable account. i cant recall the reason for it.

A fidelity advisor said to put FBALX in a taxable account? Fire that advisor.

[Tyler Aspect]

In a Fidelity account with $100,000 it is viable to build a balanced fund using Fidelity Basket Portfolios. The $60 annual fee would represent 6 basis points of extra costs.