Investing term
What is Balanced fund?
A single fund that holds both stocks and bonds at a fixed ratio, automatically rebalanced.
A balanced fund holds both stocks and bonds in one wrapper at a roughly fixed ratio — often around 60/40 — and rebalances itself automatically. Instead of buying separate stock and bond funds and keeping the mix in line yourself, you buy the single balanced fund and the manager does it for you.
It's a one-decision way to own a diversified, self-maintaining portfolio. Because the fund keeps its mix steady, you get built-in rebalancing — the discipline of trimming what's grown and topping up what's lagged — without lifting a finger. That makes balanced funds a simple, sensible core for hands-off investors, provided the fixed ratio matches your risk tolerance and the fund's fee is reasonable.
A balanced fund holds a fixed mix — often 60/40 — in a single fund that rebalances itself. Diversification and automatic rebalancing in one purchase, for hands-off investors.
For example
You buy one 60/40 balanced fund; when stocks surge and push the mix to 65/35, the fund automatically trims stocks back to 60 — rebalancing you never had to think about.
Learn it by doing
That's Balanced fund in theory — it clicks when you use it. Practise it hands-on in a free, interactive lesson (Stage 10, Building Your First Portfolio).
Try the free lesson →Why it matters to you
Balanced funds matter because they remove two things that trip up investors: the effort of maintaining an allocation and the temptation to tinker with it. By packaging a diversified mix and automatic rebalancing into one holding, they make a sound, low-maintenance portfolio available to anyone with a single purchase. The trade-offs to check are that the fixed ratio suits you and the fee is low — a balanced fund's simplicity is only a bargain if it's cheap.
⚠ Assuming the fixed ratio fits everyone
A balanced fund's mix — often 60/40 — is fixed, so it may be too aggressive for someone near a goal or too cautious for a young long-term investor. Buying one without checking whether its ratio matches your horizon and risk tolerance means outsourcing a decision you should still make. Pick a balanced fund whose fixed allocation actually suits you.