Definition
The term blend fund refers to a portfolio of securities that include both growth stocks as well as equities deemed to be undervalued by the market. The objective of a blend fund is to provide investors with higher than average capital appreciation.
Explanation
Also known as hybrid funds, blend funds specialize in purchasing equities of companies the fund's management team estimates are undervalued by the market, as well as companies they believe will experience above-average growth through capital gains. As the name implies, this is accomplished in two ways:
Purchasing equities of companies the fund's management team estimates will have above average growth in either earnings or revenues. As such, the value of these equities is expected to increase faster than average.
Purchasing equities of companies the fund's management team deems undervalued. This is believed to be a temporary condition, and the company's shares will eventually increase at a rate that outpaces the overall market.
Blend funds are frequently subdivided into categories that are based on the market capitalization of the equities held in the portfolio. For example, there can be small cap, mid cap, and large cap blend funds. Investors choosing blend funds will have relatively high risk tolerance scores, since the focus is on capital appreciation. For the same reason, these funds can be expected to exhibit above average volatility.
Related Terms
- The term hedge fund refers to an investment and business structure that pools capital from individuals and invests in a variety of securities. The objective of a hedge fund is to provide investors with above average returns by assuming above average risk.
Moneyzine EditorJanuary 19th, 2024 
The term aggressive growth fund refers to a portfolio of securities that attempts to maximize capital appreciation. There is a risk-reward trade off when investing in an aggressive growth fund; the greater returns associated with these funds means the investor is willing to accept more risk too.Moneyzine EditorJanuary 4th, 2024
The term family of funds refers to the range of mutual funds offered by a single management company. Typically, a company's family of funds will provide individuals with the ability to select from a wide array of investment objectives.Moneyzine EditorJanuary 17th, 2024
The term growth fund refers to a portfolio of stocks that are expected to provide above average earnings or revenue growth. The same equities that provide growth funds with the potential for higher than average returns will also have above average risk.Moneyzine EditorJanuary 19th, 2024- The term vulture fund refers to a portfolio of investments that specialize in holding the securities of financially distressed organizations. Vulture funds provide their investors with higher than average yields by purchasing securities at depressed prices.Moneyzine EditorSeptember 21st, 2023
- The term value fund refers to a portfolio of stocks that are deemed to be undervalued by the market. The objective of a value fund includes not only providing investors with capital appreciation, but also a steady stream of dividends.Moneyzine EditorSeptember 21st, 2023
