Mixed funds are mutual funds made up of various asset types, allowing investors to diversify their holdings without creating multiple funds. There are no restrictions on the types of assets that can be included, and the risk value of assets in the fund can vary widely. Mixed funds are difficult to classify as more or less risky than other mutual funds, but they are generally considered less risky than stock funds and riskier than bond funds.
A mixed fund is a form of mutual fund that is made up of a number of different asset types, rather than one or two asset types. The basic idea behind a blended fund is to allow an investor to vary the diversity of his or her holdings without the need to create several different funds.
Often referred to as hybrid funds, there are no real restrictions on the types of assets that can be included in a single blend fund. It is possible to have an eclectic mix of stocks, bonds and money market papers as part of a mixed fund. There is also no prohibited percentage of the blend fund to be made up of any asset class. Therefore, it is possible for a mixed fund to be stock-heavy and contain only a few bonds and other securities, or to be more or less evenly allocated across asset classes.
Just as there is no ideal balance between the type of assets that can be part of a blended fund, there is also no recommended balance between the risk value of an asset in the fund and the rest of the assets. Indeed, many examples of the blended fund will contain a diverse mix of assets that carry a wide range of risks, from very safe to extremely risky. The exact composition of the mixed fund is up to the individual investor and the level of risk he wishes to consider as part of the overall investment scheme.
Due to the different nature of the mixed fund, it is very difficult to classify the fund as more or less risky than other forms of mutual fund. However, there is a school of thought that tends to position the blend fund as less risky than stock mutual funds, while still being riskier than the more simplistic bond funds.
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