Balanced fund

A  balanced fund is a mutual fund that holds multiple asset classes in a single portfolio. Typically these funds hold a stock component; a bond component, and in some instances, a cash component. Some balanced funds may hold additional asset classes beyond these traditional asset classes, such as precious metals and commodities. Many balanced funds maintain a fixed asset allocation; some pursue a variable allocation policy, changing asset weightings according to market conditions. Target date funds are balanced funds that gradually change asset class weightings in harmony with an investor's changing need for a lower risk profile over time.