Balanced ETF Definition

Learn the definition of balanced etf and other ETF terminology from the etf.com glossary.

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Reviewed by: etf.com Staff
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Edited by: etf.com Staff

Learn more about Balanced ETFs

A balanced ETF, also known as an asset allocation ETF or a hybrid ETF, is a type of exchange-traded fund that invests in a diversified mix of assets, typically including stocks and bonds. The goal of balanced ETFs is to provide investors with a balance of potential for capital appreciation and income generation while also managing risk. Balanced ETFs are designed to offer investors a diversified investment strategy that can help them achieve their long-term financial goals. The asset allocation of a balanced ETF is typically determined by the fund's investment objective and risk profile. For instance, a more conservative balanced ETF may allocate a larger portion of its assets to bonds, while a more aggressive balanced ETF may allocate a larger portion of its assets to stocks. Balanced ETFs are often considered to be a good choice for investors who are seeking a diversified and relatively low-risk investment option. They can also be a suitable option for investors who are approaching retirement and may want to reduce their exposure to stocks and increase their exposure to bonds.

Related Terms

Exchange-Traded Fund (ETF), Diversification, Asset Allocation

ETF Glossary is etf.com’s collection of key terms and definitions related to exchange-traded funds. ETFs are investment funds that are traded on stock exchanges, and they can encompass a wide range of asset classes, including stocks, bonds, commodities and more. Given the diverse range of ETFs and the complexity of financial markets, having a clear understanding of ETF-related terminology is instrumental for investors looking to make informed decisions, manage risks effectively and navigate the evolving landscape of ETF investments.