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Understanding investment types

What are multi-asset or balanced funds?

91% of our low-cost balanced funds performed better than their peer-group averages over the past 10 years.*
4 minute read

Get a mix of stocks and bonds in one fund

Combine the potential for income and growth

Balanced mutual funds invest in both bonds, which focus primarily on income, and stocks, which aim for investment growth.
 

Add stability to your portfolio

The bond portion of the fund helps offset the risks associated with the stock portion—providing you with a "balanced" investment.
 

Automatically maintain your asset mix

You never have to rebalance a balanced fund—it's done for you automatically. Some funds maintain a set asset mix, while others grow more conservative over time.
 

Spread out your exposure to risk

By potentially holding hundreds—sometimes thousands—of bonds and stocks in a single balanced fund, you get more diversification than you would buying individual bonds and stocks.

Bond

A debt security (IOU) issued by a corporation, government, or government agency in exchange for the money the bondholder lends it. In most instances, the issuer agrees to pay back the loan by a specific date and make regular interest payments until that date.

Stock

A security that represents part ownership, or equity, in a corporation. Each share of stock is a proportional stake in the corporation's assets and profits, some of which could be paid out as dividends.

Rebalance

To move money in your account so that your overall portfolio aligns with the asset mix you selected, usually after market movements have caused it to change.

Asset Mix

The way an investment portfolio is divided among various asset classes, such as cash investments, bonds, and stocks. Also known as investment mix.

Diversification

The strategy of investing in different asset classes and among the securities of many issuers in an attempt to lower overall investment risk.

How to choose a balanced fund

Picking a Vanguard balanced fund generally depends on whether you're investing for a specific goal, like retirement, or you have another goal in mind.
 

Target Retirement Funds

If you're investing for retirement, you can get a complete portfolio in a single fund with a Vanguard Target Retirement Fund. Simply choose a fund based on the date you plan to retire or your current age, and the fund will gradually grow more conservative the closer you get to retirement.

See which Target Retirement Fund fits your timeline
 

LifeStrategy Funds

If you'd prefer a fund that maintains a set asset mix, a LifeStrategy® Fund can help you reach other financial goals.

Match your risk tolerance to a LifeStrategy Fund
 

Traditional balanced funds—index and actively managed

If you'd like a set asset allocation based on the level of risk you're comfortable with, choose from a variety of traditional index or actively managed balanced funds. Many people start with a core portfolio of index funds and then add actively managed funds for certain segments.

Index mutual funds & ETFs

You have a chance to keep pace with market returns because index funds try to mirror certain market segments. But not all index funds are created equal.

See how our index funds stand above the rest

Actively managed mutual funds

Or you can try to beat market returns with investments hand-picked by professional money managers. You may be surprised by our active funds' performance.

Discover our active funds' quiet success story

Want to see a side-by-side comparison of the 2 types of funds?

Compare index funds vs. actively managed funds

See a complete list of Vanguard balanced funds

We're here to help

Have questions? Contact us

Need some guidance?

Get help & advice to narrow your options

*For the 10-year period ended September 30, 2024, 21 of 23 Vanguard balanced funds outperformed their Lipper peer-group averages. Results will vary for other time periods. Only mutual funds and ETFs (exchange-traded funds) with a minimum 10-year history were included in the comparison. Source: Refinitiv Lipper, an LSEG Business. The competitive performance data shown represent past performance, which is not a guarantee of future results. View fund performance

Investments in Target Retirement Funds are subject to the risks of their underlying funds. The year in the fund name refers to the approximate year (the target date) when an investor in the fund would retire and leave the workforce. The fund will gradually shift its emphasis from more aggressive investments to more conservative ones based on its target date. An investment in a Target Retirement Fund is not guaranteed at any time, including on or after the target date.

Each LifeStrategy Fund invests in 4 broadly diversified Vanguard funds and is subject to the risks associated with those underlying funds.

All investing is subject to risk, including the possible loss of the money you invest. Diversification does not ensure a profit or protect against a loss.