Balanced fund can be defined as a fund that is comprised of a balanced ratio of the stock component, a bind component and monetary component in the form of a single fund. All these components create a single portfolio. These kinds of funds that have more than one component are called as hybrid funds. These hybrid funds show a relative mix of the funds that comprised of bonds and stocks. These hybrid funds either show a moderate or balanced formation of the different type of funds or they show a conservative representation of various components that include bonds and stocks and in some cases money as well. The moderate balanced fund shows a higher equity component where as a conservative balanced fund shows a high fixed income component within the representation of the fund.
A balanced fund focuses on those investors that tends to acquire low risk while investing their funds and prone towards more safety in terms of investing in more than one type of funds such as a combination of stocks, bonds and money. Thus the balanced fund makes them an attractive option to the investor as they include a mixture of safety, income and capital appreciation during the time of investment. Although the balanced funds represent asset allocation family however the balanced funds do not change the material form of the assets that are included in their portfolio.
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