Low Risk Balanced Fund

Low Risk Balanced Fund

http://balancedfund.net/low-risk-balanced-fund.php

Balanced mutual funds are both risky and stable because of the debt component in it. It combines both shares and debt through investing in stocks, bonds and others. It is a wise choice to take for first time investors, conservative investors and for those with a fair amount of stocks who want to balance with some debt investments.

Some of these investors who want low risk invest in balanced fund because a large portion of the investments go to bonds. This is because of the belief that governments do not go out of business like corporations do. However, low risk balanced fund is not foolproof.

It is, however, smart to be cautious. Since equity funds require at least 80% of their investments in stock, it falls dramatically when the stock market plummets. Low risk balanced fund minimizes this fall because of the investment in bonds. Balanced fund can reduce stock exposure to as low as 40%, therefore also lessening the risk. Low risk balanced fund also have given higher returns in the past 3 years. This however, is not expected to last in the long run, but as of now investing in a balanced mutual fund is the popular thing to do.