Mar 23 2009
Balanced funds Investment - balancing income, growth and security
Balanced funds aim for three things: income, growth of capital, and stability of principal. They do this by buying a mixture of stocks, bonds, and money market instruments. They differ from asset allocation and target funds in that the manager doesn’t ask you whether you’re conservative or trying to retire in 2045. Consequently, these portfolios are not going to become more conservative as you age, nor more aggressive because you’re a thrill seeker. The fund manager will decide on the mix of assets based on what he or she believes to be most prudent at the time. This can make these funds more profitable than target-date funds.
Risk: Moderate
Potential for capital appreciation: Moderate
Potential for current income: Mixed
