<PAGE>
July 27, 1995
Securities and Exchange Commission
Judiciary Plaza
450 Fifth Street, N.W.
Washington, D.C. 20549
RE: RULE 24F-2 NOTICE FOR KEYSTONE BALANCED FUND (K-1)
(FORMERLY NAMED KEYSTONE CUSTODIAN FUND, SERIES K-1)
(THE "FUND"); REGISTRATION STATEMENT NO. 2-10527/811-96
Sirs and Madams:
Pursuant to Rule 24f-2(b)(1) under the Investment Company Act of 1940 (the
"Act"), you are hereby notified as follows:
(i) The fiscal year of the Fund for which this Notice is filed is the
year ended June 30, 1995.
(ii) The number of shares of the Fund registered under the Securities
Act of 1933 other than pursuant to Rule 24f-2 remaining unsold at
the beginning of such fiscal year was -0-.
(iii) The number of shares of the Fund registered during such fiscal year
other than pursuant to Rule 24f-2 was 4,453,123.
(iv) The number of shares of the Fund sold during such fiscal year was
15,603,073.
(v) The number of shares of the Fund sold during such fiscal year in
reliance upon registration pursuant to Rule 24f-2 was 15,603,073.*
<PAGE>
Securities and Exchange Commission
July 27, 1995
Page 2
*Pursuant to Rule 24f-2(c), the filing fee for this
Notice was calculated as follows:
(a) Actual aggregate sales price of
shares sold pursuant to Rule
24f-2 during the fiscal year: $ 147,551,759
(b) Reduced by the difference between:
(1) The actual aggregate redemption
price of shares of the Fund
redeemed during the fiscal year: $ 355,376,426
and
(2) The actual aggregate redemption
price of such redeemed shares
previously applied pursuant to
Rule 24e-2(a) in filings made
pursuant to Section 24(e)(1) of
the Act: $ -0-
($207,824,667)
-------------------------
(c) Net aggregate sales price: ($207,824,667)
(d) Fee computed at 1/29 of 1%: $ -0-
If you have any questions or would like further information, please call me
at (617) 338-3686.
Sincerely yours,
Melina M. T. Murphy
Enclosure
<PAGE>
July 27, 1995
Keystone Balanced Fund (K-1)
200 Berkeley Street
Boston, Massachusetts 02116-5034
RE: NOTICE PURSUANT TO RULE 24F-2 UNDER THE INVESTMENT COMPANY
ACT OF 1940 ("1940 ACT")
Gentlemen:
I am Senior Vice President and General Counsel to Keystone Investment
Management Company (formerly named Keystone Custodian Funds, Inc), investment
adviser to Keystone Balanced Fund (K-1) (formerly named Keystone Custodian Fund,
Series K-1) (the "Fund"). You have asked for my opinion with respect to the
issuance of an additional 15,603,073 shares of the Fund under the Fund's
Declaration of Trust, as amended and restated ("Restatement of Trust"), and
pursuant to the Fund's indefinite registration of its shares under Rule 24f-2
under the 1940 Act. The Fund is filing its Rule 24f-2 Notice to which this
opinion is appended to make the issuance of such shares definite in number for
its fiscal year ended June 30, 1995.
To my knowledge, a Prospectus is on file with the Securities and
Exchange Commission as part of Post-Effective Amendment No. 83 to the Fund's
Registration Statement covering the public offering and sale of the Fund's
shares for the period during which such shares were issued.
In my opinion, such shares, if issued and sold in accordance with the
Fund's Restatement of Trust, By-Laws ("By-Laws"), and offering Prospectus, were
legally issued, fully paid, and nonassessable by the Fund, entitling the holders
thereof to the rights set forth in the Restatement of Trust and By-Laws and
subject to the limitations stated therein.
My opinion is based upon my examination of the Restatement of Trust; a
review of the minutes of the Fund's Board of Trustees, signed by the Secretary
of the Fund, authorizing the registration of shares pursuant to Rule 24f-2 under
the 1940 Act and the issuance of such additional shares; and the Fund's
Prospectus. In my examination of such documents, I have assumed the genuineness
of all signatures and the conformity of copies to originals.
<PAGE>
Keystone Balanced Fund (K-1)
July 27, 1995
Page Two
I hereby consent to the use of this opinion in connection with the
Fund's Rule 24f-2 Notice making definite the number of such additional shares
issued.
Sincerely yours,
Rosemary D. Van Antwerp
Senior Vice President and
General Counsel
10470285
