Balanced Fund

A balanced fund is a mutual fund that places its monies into several types of investment vehicles in the attempt to provide returns that include both income and growth.  When a mutual fund puts money into common stocks, preferred stocks, bonds, and even money market funds, they are a balanced fund.  This is also referred to as an asset allocation fund.

Investors looking for a blend of income and capital appreciation are attracted to balanced funds.  The percentages applied to each asset class in this type of mutual fund will usually remain within a range of minimum and maximum values.