Investing Answers Building and Protecting Your Wealth through Education Publisher of The Next Banks That Could Fail
Investing Answers Building and Protecting Your Wealth through Education Publisher of The Next Banks That Could Fail

Blend Fund

What it is:

A blend fund, also called a hybrid fund, is a mutual fund composed of a combination of securities from different asset classes designed to increase diversification with just a single fund.

How it works (Example):

A blend fund differs from a traditional fund, which usually focus exclusively on one asset class such as value stocks or highly rated domestic bonds. Instead, a blend fund will own investments across several asset classes, providing more diversification in one fund than traditionally available.

For example, a blend mutual fund might own 25% value stocks, 25% growth stocks, and 50% high-quality bonds. An investor purchasing this fund will thus gain exposure to growth and value stocks, as well as bonds, without having to purchase three different funds.

Why it Matters:

Blend funds offer a way for investors to easily increase their exposure across several asset classes without having to purchase and track several different funds.