Which fund comprises a mix of stocks and bonds?

Which fund comprises a mix of stocks and bonds?

• A. Balanced Fund
• B. Growth Fund
• C. Income Fund
• D. Index Fund

Answer: (A)

Mixing stocks and bonds in a single fund is the hallmark of a balanced fund. It seeks to combine growth potential from equities with income and some stability from fixed income, giving you diversification within one investment and a smoother overall ride than an all-stock approach. Balanced funds typically aim for a middle-ground allocation between stocks and bonds, often around 60% stocks and 40% bonds, though the exact mix can vary by fund. This setup is especially helpful for investors who want a straightforward, one-stop portfolio that provides both growth and income while dampening volatility. By including both asset classes, the fund can participate in stock-market gains while also cushioning downturns with bonds. In contrast, a growth fund concentrates on stocks for appreciation, an income fund emphasizes income-producing assets like bonds, and an index fund tracks a benchmark and is not inherently a mixed portfolio unless it is specifically designed as a balanced index.

Mixing stocks and bonds in a single fund is the hallmark of a balanced fund. It seeks to combine growth potential from equities with income and some stability from fixed income, giving you diversification within one investment and a smoother overall ride than an all-stock approach. Balanced funds typically aim for a middle-ground allocation between stocks and bonds, often around 60% stocks and 40% bonds, though the exact mix can vary by fund. This setup is especially helpful for investors who want a straightforward, one-stop portfolio that provides both growth and income while dampening volatility. By including both asset classes, the fund can participate in stock-market gains while also cushioning downturns with bonds. In contrast, a growth fund concentrates on stocks for appreciation, an income fund emphasizes income-producing assets like bonds, and an index fund tracks a benchmark and is not inherently a mixed portfolio unless it is specifically designed as a balanced index.