A balanced portfolio aims to return long-term financial gains while providing income and dividend payout to its investors. Investments within the portfolio may consist of equities, bonds and other asset classes. The primary objective of a balanced portfolio is to minimise volatility by holding to securities of varying asset classes.
Due to the nature and investment objectives of a balanced portfolio, income and dividend payout may or may not be available and the payout is neither fixed nor guaranteed. The investor is still subjected to price and valuation swings during periods of market volatility.
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A balanced portfolio may be suitable for investors seeking potential capital gains while receiving an income payout. However, during periods of high market growth, the absolute returns may be lower compared to a growth and capital appreciation portfolio. Similarly, when financial market are down and investors are fleeing towards safer assets classes, a balanced portfolio will still experience a decline in valuation.
The sections below looks into Unit Trust Funds focusing on maintaining a balanced portfolio as a primary investment objective.
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