A balanced fund is a type of mutual fund that is available through many different investment companies. Typically, balanced funds have a portfolio consisting of about 60% stocks and 40% bonds and other fixed-income securities. Thus, within one mutual fund, investors have the diversification of having two asset classes (i.e., stocks and bonds) as well as having many different securities within each asset class.
Balanced funds are well suited for moderately aggressive investors and those with an income, as well as a growth, objective. They are also suitable for beginning investors and those with a small amount of money to invest because these investors can obtain a high degree of diversification within a single mutual fund account.
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