102: Determining Your Goals and What Theyll Cost
108: Creating Your Investment Policy Statement
110: Avoiding Overlap When Building a Portfolio
201: How to Juggle Different Investment Goals
205: The Best Investments for Tax-Deferred Accounts
206: The Best Investments for Taxable Accounts
209: How to Invest for Intermediate-Term Goals
308: Adding Mutual Funds to a Stock Portfolio
310: How to Withdraw from Your Portfolio in Retirement
508: The Small-Company Advantage: Fact or Fiction?
Course 209: How to Invest for Intermediate-Term Goals
A balanced fund is another option for intermediate-term investors. Balanced funds, which are often called hybrid funds, own both stocks and bonds. They earn the balanced moniker by keeping the balance between the two asset classes pretty steady, usually placing about 60% of their assets in stocks and 40% in bonds.
For some in-betweeners, though, that stock position may be too small. Many balanced funds hold larger stock positions, however. Review a balanced funds portfolio holdings to find out how largeits stock position is. (Morningstar divides balanced funds into two categories: conservative-allocation funds, which hold only 20%-50% of their assets in stocks, and moderate-allocation funds, which are more aggressive, holding 50%-70% of their assets in stocks. Most balanced funds names wont indicate whether they are conservatively or moderately allocated, so youll need to check their Morningstar category and dig into their portfolio holdings to investigate.)
The downside to balanced funds: costs. You can often buy a short-term bond fund and a large-blend fund and pay less in annual expenses than if youd just bought a balanced fund.
But balanced funds are certainly convenient, and theyre not all high-cost. Weve put together a list of modest-cost balanced funds s Fund Screener. Heres what we did:
Under Morningstar Category, choose Moderate Allocation or Conservative Allocation.
Under Expense Ratio Less Than or Equal To, choose Category Average.
Under Morningstar Category Rating, choose 4 and 5.
From the Results Page, click on the Expense Ratio (%) column to rank the list from lowest to highest expense ratios.
You can manipulate any of the inputs, if youd like, narrowing your search even further.
Premium Members can also find a list of the balanced funds Morningstar fund analysts like best in ourFund Analyst Picks. (This is a benefit of Premium Membership, but nonmembers cansign up for afree trial.)
Learn how to invest like a pro with Morningstars Investment Workbooks (John Wiley & Sons, 2004, 2005), available at online bookstores.