Balanced fund
A balanced fund is a or that holds a set mix of and within a single , most commonly something in the range of 60% and 40% , though the exact split varies by fund. The goal is to give an investor across the two major asset classes in one purchase, rather than requiring them to buy separate and funds and manage the mix themselves.
The portion is meant to provide growth over time, while the portion is meant to cushion the during declines and provide steady income. Because the manager rebalances back toward the fund's target mix periodically, a balanced fund tends to sell some after a rally and buy more after a decline, a discipline many struggle to follow on their own.
Balanced funds are popular with investors who want a simple way to hold a without picking individual and funds or timing when to shift between them. They generally show less than a fund holding only , but also less long-term growth potential, since a meaningful portion of the is always allocated to the side, which is more stable but typically earns less over time.