NEW YORK ( TheStreet) -- With weak employment data rattling the markets, it makes sense to add a steady mutual fund to your portfolio. Among the most reliable choices are balanced funds, which hold mixes of stocks and bonds. Top balanced portfolios limit losses in downturns and deliver decent results in bull markets.Many balanced funds hold static allocations, keeping 60% of assets in high-quality stocks and the rest in investment-grade bonds. However, some mutual funds hold a wider variety of securities and shift their allocations as conditions change. Skilled managers can boost returns by making the right calls. A solid choice is the Franklin Income Fund ( FKINX), which has returned 7.2% annually during the past 10 years, outdoing 98% of its peers in Morningstar's ( MORN) conservative allocation category. A year ago, the fund had 70% of its assets in fixed income and the rest in equities. Since then Franklin has lowered its bond allocation to 60%. Manager Ed Perks says corporate bonds have been rallying during the past year as investors worry less about default risk. When prices climb, yields fall. The yields on investment-grade corporate bonds dropped from more than 9% to less than 5%. "We had tremendous performance in some bonds, and now they seem overpriced," says Perks. In some cases, Perks sold a company's bonds and bought its stock because the shares seemed like relative bargains. He recently bought common shares of Dominion Resources ( D), a Virginia electric utility. The stock yields 4.5%, a bit more than the yield on the company's 10-year bonds. Franklin aims to provide shareholders with steady income, and most often the fund succeeds. The current yield is 7.4%. To generate income, Franklin holds a wide collection of assets, including convertibles and high-yield bonds. Perks has been emphasizing high-yield bonds, which are rated below-investment grade. He says many solid issues yield 9%, a tempting payout. Another steady option is the First Focus Balanced Fund ( FOBAX), which has returned 6% annually during the past 10 years, outdoing 97% of moderate allocation funds. The fund typically devotes 45% to 75% of its assets to equities. When markets looked shaky in 2008, First Focus had less than 50% of assets in stocks, with most of the rest in investment-grade bonds. As the economy improved last year, the managers raised their equity holdings to 70%. Lately, they have dialed back the position to 61%.