Balanced Fund is a type of investment fund that combines assets from different asset classes, such as stocks, bonds and cash equivalents. Through strategic diversification, balanced funds aim to provide investors with higher returns over the long term than what could be achieved through investing in any single asset class alone. By including both growth and income investments within the same portfolio, balanced funds also offer some protection against market volatility.
The majority of balanced funds are actively managed by professional money managers who use their expertise to choose which assets should be included and how much of each should be allocated in order to meet the fund’s goals. These goals can range from preserving capital for conservative investors or generating high returns for more aggressive investors.
Since these types of funds are made up of many different investments, they tend to have lower risk profiles than those associated with investing in one particular sector or kind of security; however this does not mean that they do not carry any risks at all. Investors considering a balanced fund should understand the fees charged by their chosen fund manager as well as research its track record before investing any capital into it.
Finally, since these types of investments involve buying multiple securities at once rather than individual ones – meaning there is no guarantee which specific stocks will make up your portfolio – it may take more time and effort on behalf of an investor when researching potential purchases compared to selecting an individual stock or bond option instead
