What about Balanced Funds for Your Intermediate-Term Goals?
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What about Balanced Funds for Your Intermediate-Term Goals?
A balanced fund is another option for intermediate-term investors. Balanced funds, which are often called hybrid funds, own both stocks and bonds. They earn the "balanced" moniker by keeping the balance between the two asset classes pretty steady, usually placing about 60% of their assets in stocks and 40% in bonds.
Things To Know
- Balanced funds, or hybrid funds, own both stocks and bonds.
Does the 60/40 split work for you?
For some in-betweeners, though, that stock position may be too small. Many balanced funds hold larger stock positions, however. Review a balanced fund’s portfolio holdings to find out how large its stock position is. Most balanced funds’ names won’t indicate whether they are conservatively or moderately allocated, so you’ll need to dig into their portfolio holdings to investigate.
The cons of balanced funds
The downside to balanced funds: costs. You can often buy a short-term bond fund and a large-blend fund and pay less in annual expenses than if you’d just bought a balanced fund.
But balanced funds are certainly convenient, and they’re not all high-cost.
