cheapbag214s
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 Posted: Sun 11:38, 03 Nov 2013 Post subject: for growth |
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Balance your Investments with Balanced Funds
A balanced fund is a fund in which investment is made in combination of equity class and debt class capital to ensure both income and capital appreciation on investment while avoiding excessive risk. What is a balanced fund?A balancedfund is a fund in which investment is made in combination of equityclass and debt class capital to ensure both income and capitalappreciation on investment while avoiding excessive risk. In suchinvestment, a mutual fund usually buys a combination of common stock, preferred stock,bonds, and short-term bonds. Inother words, balanced funds reflect singlemutual fund providing combined benefits of investment in stocks (for growth) andbonds (for income).Key featuresBalanced funds offer balanced solutions for those seekingstability and growth from their investment. Some of the peculiar features ofsuch funds are as follows: ·Balancedfund seeks to optimize therisk-adjusted return by distributing assets between equity and debt capital. ·Such fundsbelong to "asset allocation" family. The amounts thatsuchamutual fund invests into each asset class usually must remainwithin a set minimum and maximum.·Generally,[url=http://www.tymarc.com/]christian louboutin sale[/url], anaverage balance fund maintains a 60:40 equitydebt ratio, which means 60% of investment in equity and rest in debt capital. However,equity allocation in such funds can go up to 80% in bullish markets and even godown to 65% in bearish markets. Such allocation tends to reduce volatility ofreturn by managing downturnsin the stockmarket without too much of a loss.·By investing in equity for capital appreciation and debt for stable returns,you can reduce instability of returns by increasing / decreasing exposure tovarious markets, based on in-depth research and analysis.Investor ProfileBalance fund schemes provide benefits of both equity and debtscheme in a single fund investment. These funds are usually opted by A) Investors looking for debt plus returns B) Investors considering reasonable returns withequity and lower risk through diversificationThus,balanced funds provides the twin benefits ofgrowth from equity markets and steady income from debt market as well as lowervolatility of returns and lower risk through diversification.
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