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What is a balanced fund?
The portfolio of a balanced fund consists of equity and fixed income investments. Its assets are diversified across various markets and sectors, based on the prevailing market conditions. The minimum subscription is 10 euros.
Balanced funds invest in the fixed income and equity markets
A traditional balanced fund includes equity and fixed income investments, offering a good diversification over these two asset classes. The relative proportion of equities and fixed income investments in the fund allows the portfolio manager to adjust the fund’s risk and return potential. Balanced funds have different profiles and they are structured and managed according to the policies described in their prospectus.
There are lots of different balanced funds from which investors can find the ones most suitable for them. The easiest way to determine the fund that suits you is to create a personal investment plan in a meeting with one of our investment advisers. If you don’t need our experts’ advice, preferring to decide on your investments independently, you can discover the various alternatives using our Portfolio Designer tool.
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Fund composition affects risk level
As a general rule, we can say that the higher the proportion of equities in a balanced fund, the higher the fund’s risk and potential return. For example, the Nordea Savings 15 Fund invests 15% of its assets in equities and the remaining 85% in fixed income instruments. Its low equity weight makes it a good alternative for cautious investors. In the Nordea Savings 75 Fund, equities make up approximately 75% of the portfolio, and this higher weight increases the fund’s risk and potential return significantly. That’s why it is more suitable for investors who are willing to tolerate more risk in order to achieve a higher return.
You can find detailed information on funds in their prospectus
The proportion of equities and fixed income investments is stated in each fund’s information and key investor information document. The key investor information document also provides information on the fund’s other features and the portfolio manager’s management style. For example, the portfolio manager may in certain market conditions adjust ratio between equities and fixed income investments in order to improve the fund’s return and preserve its value.
You can find the key investor information documents for Nordea funds in our Funds Now service. Go to the Funds Now service.
