Friday, December 24, 2010

Balanced Fund

A balanced fund invests in both equity (shares/stocks) and debt (bonds/cash). These funds will generally invest a fixed percentage in each asset class, for instance a conservative balanced fund may have a small e.g. 10% allocation to growth assets like equities, whereas an aggressive growth balanced fund may have as much as 90% invested in equities. Some balanced funds employ a wide range of asset classes, incorporating stocks, bonds, international and domestic assets, cash, commodities, foreign currency exposure, etc. In essence balanced funds are like a pre-packaged, ready assembled portfolio. A good financial advisor will recommend a balanced fund with an appropriate asset mix based on an investor's age, income, risk tolerance, and objectives.

Synonyms: Hybrid fund, Multi-asset fund, Mixed fund, Portfolio, Asset allocation, Conservative fund, Moderate fund
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