Balanced fund
A
mutual fund that invests its assets into the money market, bonds,
preferred stock, and common stock with the intention to provide both
growth and income.
Similar to an
asset allocation fund.
A balanced fund is geared towards investors looking for a mixture of
safety, income, and capital appreciation. The amount the mutual fund
invests into each asset class usually must remain within a set
minimum and maximum.
Usually, balanced fund allocate a generous portion
of their portfolio to bonds and are very sensitive to interest
rates. These funds are more suitable for conservative growth
oriented investors interested in income oriented funds. Their lower
risk of sharp swings makes them appealing to investors that plan to
exit in a short term horizon.
