What is a Balanced Fund?

A balanced fund is a guaranteed fund that invests in common stock, preferred stock and bonds in a fixed way. The basic basis for using balanced funds is that the prices of common stocks fluctuate relatively frequently, the prices of preferred stocks and bonds are relatively stable, or the volatility of common stock prices is relatively large. The volatility of preferred stock and bond prices is relatively small. When the price of common stocks rises, the fund mostly transfers investment to preferred stocks and bonds to prevent the stock market from reversing; when the stock market declines, it sells bonds and purchases stocks in order to realize profits when the stock market rises. ^[1]

Balance fund

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A balanced fund is a guaranteed fund that invests in common stock, preferred stock and bonds in a fixed way. The basic basis for using balanced funds is that the prices of common stocks fluctuate relatively frequently, the prices of preferred stocks and bonds are relatively stable, or the volatility of common stock prices is relatively large. The volatility of preferred stock and bond prices is relatively small. When the price of common stocks rises, the fund mostly transfers investment to preferred stocks and bonds to prevent the stock market from reversing; when the stock market declines, it sells bonds and purchases stocks in order to realize profits when the stock market rises. ^[1]

Balanced funds can be roughly divided into two types, one is a fund that pursues balance in investment style, and the other is a fund that pursues balance in asset allocation structure.

According to different investment objectives and investment styles, funds can be divided into three types: growth, value, and balance. A growth fund refers to a fund that pursues capital appreciation as its basic goal and seldom considers current income. A value fund is a fund whose basic goal is to pursue stable recurring income. A balanced fund refers to a fund that seeks a balance between capital appreciation and current income, that is, between long-term income and short-term income. Generally speaking, growth funds have high risks and high returns, value funds have low risks and low returns, and balanced funds have risks and returns in between.