A blended fund is a mutual fund that, instead of being comprised of only one or two types of assets, has a blend of a number of different types. Many investors find that they benefit well from this investment option and try to always ensure it is included in their portfolio.
What is the Purpose of a Blended Fund?
The purpose of creating this type of mutual fund is to allow investors the opportunity to diversify their investments. Instead of having to establish several different funds, investors can combine various holdings into one, sparing them a lot of hassle of keeping up with them all.
Why Investors Love Them
The following is a short list of the various aspects of blended funds that investors love:
- No asset-type restrictions: When purchasing this type of mutual fund, you can enjoy no real restrictions on the types of assets that can be included. You can include stocks, bonds, money market securities and whatever else you and/or your fund manager see fit.
- No percentage specifications: You don’t have to worry about including a specific percentage of any one type of asset to successfully create one. For example, if you want yours to be comprised of all stocks, you can do that. Or if you want to create a mixture, you can do that as well.
- No risk value requirements: Investors also enjoy the idea that they don’t have to maintain assets with any particular level of risk. So you won’t have to worry about being forced into a package with equal parts low, moderate and high risk. Instead, you can tailor your package as you wish, giving you tons of freedom in diversification.
If you enjoy the idea of diversifying your portfolio, yet don’t want to worry of keeping track of multiple assets of many types, then combining them into a blended fund may be a good route to take. But before you dive in, it’s good to conduct additional research to determine which of the many mutual fund options available is best for you.