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What are balanced funds?

When you invest in our funds, the risks of investment will be reduced thanks to diversification. The funds' assets are spread over different markets and sectors, and therefore they offer access to several different investment alternatives. Funds are suitable for investors who want professionals to manage their investments according to the market situation.

  • Minimum subscription: 10 euros
  • The portfolio manager monitors the markets: when equity prices are expected to decline, the weight of fixed income investments is increased and vice versa.
  • You can buy and sell fund units at any time.

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Balanced funds invest in fixed income and equity markets

Balanced funds invest both in equities and fixed income instruments, and the proportion of either asset class in a fund's investments can be altered according to the market situation. The minimum and maximum level for each asset class is stated in each fund's rules.

The weights of fixed income and equity market investments in a balanced fund determine its level of risk and return. The expected long-term return is influenced by how assets are distributed over fixed income and equity markets in normal market conditions.

Fund composition affects risk level

The risk involved in a balanced fund is influenced by

  • the allocation of the fund’s investments between fixed-income instruments and equities
  • the interest rate and credit risk related to the fixed-income investments 
  • the stock market risk related to the equity investments.

In general, a higher weight of equity investments in a balanced fund means a higher level of risk. But it’s good to keep in mind that a higher exposure to the stock market also means a higher expected return on your investment. The fixed-income investments in a balanced fund are there to offset the risk involved in the equity investments and reduce the overall risk of the fund. 

Balanced funds are therefore riskier than fixed-income funds because part of the fund’s assets is invested in equities. However, they are also less risky than equity funds, as they include fixed-income investments which provide stability.

We offer various types of balanced funds

You will find six different balanced funds in our selection. Our funds for savers include the following balanced funds: Savings 15, Savings 30, Savings 50 and Savings 75. 

They differ in terms of their asset allocation. Savings 15 and Savings 30 are balanced funds that focus on fixed-income investments, while Savings 75 focuses on equity investments. Savings 50 invests equally in both fixed-income instruments and equities. These funds invest their assets primarily in Nordea’s other fixed-income and equity funds but they can also make direct investments. 

In addition to our funds for savers, we also offer two other balanced funds, namely Stable Return A and Stable Return I. These funds follow a Stable Equities investment process in which the foreign exchange risk is mostly hedged. Balanced funds provide access to hundreds of different investment products. The investments can also be spread across different geographical regions.

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