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
 
Comments?
If you have any questions, or disagree with the definition, or if you have anything to add then please do add your comments in the box below.

No comments:

Post a Comment