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Sizing Up 2 Balanced Fund Picks at T. Rowe

Leo Acheson, CFA

Leo Acheson: T. Rowe Price offers two funds with the world "balance" in their name, T. Rowe Price Balanced (RPBAX) and T. Rowe Price Personal Strategy Balanced (TRPBX). The funds are similar in that both invest in really strong underlying T. Rowe Price strategies that span stocks, bonds, and geographic regions. The funds also both leverage T. Rowe Price's proven and experienced asset-allocation group.

However, there are a few differences that are worth pointing out. Most notably, T. Rowe Price Balanced tends to be a simpler core option. It invests in broad asset classes, such as large caps, international stocks, core fixed income, and high-yield bonds, whereas Personal Strategy Balanced invests in those same asset classes but also has dedicated allocations to more-specialized pockets of the market, such as emerging-markets stocks and bonds, U.S. small caps, and international fixed income.

Because T. Rowe Price Balanced is a little bit simpler, it costs a little bit less. Most recently, it charged 64 basis points as compared with 71 at T. Rowe Price Personal Strategy Balanced. T. Rowe Price Balanced also targets a slightly higher equity allocation, aiming to keep about 65% of assets in stocks as compared with 60% at T. Rowe Price Personal Strategy Balanced.

Overall, we think that both funds are really solid long-term options, and we rate them both Silver.