While they have traditionally outperformed income funds in the long term, they are generally more volatile than either income or money market funds. Click here to learn more about the possible risks and returns of these and other investment instruments. Balanced funds invest in a broad mix of debt and equity instruments including money market securities, bonds, preferred stocks and common stocks. They are specifically designed to protect investors from market fluctuations through diversification. Balanced funds generally provide investors with both regular income and growth.
Growth is achieved through the capital appreciation of common shares.
The objective of most balanced funds is to achieve the highest return consistent with a low-risk strategy. While they usually provide higher returns than income funds, balanced funds cannot normally keep pace with pure equity funds in a rising market. Click here to learn more about the possible risks and returns of these and other investment instruments. International funds International funds promote global investment, allowing investors to diversify their holdings by tapping into growing markets abroad. Some international funds invest in a specific country like the United States.