Balanced Fund
A mutual fund that buys a combination of common stock , preferred stock , bonds , and short-term bonds, to provide both income and capital appreciation while avoiding excessive risk . In the hybrid category, balanced funds tend to stick to a relatively fixed allocation of stocks and bonds. Actively managed asset allocation funds tend to have portfolios with a mix of stocks and bonds that responds to market conditions as perceived by the fund manager . Passively managed asset allocation, life-cycle and target-date funds generally have a stock-bond mix that changes over a lifetime, moving progressively from aggressive to more conservative structures. The purpose of balanced funds (also sometimes called hybrid funds ) is to provide investors with a single mutual fund ...