Explore commonly used personal finance terms.
An asset allocation fund is a mutual fund that diversifies investments across different asset classes, such as stocks, bonds, and cash. These funds are designed to balance risk and return, offering a mix of assets in line with specific investment goals or risk tolerance. Asset allocation funds are popular for retirement accounts and portfolios that need diversification without the complexity of managing individual securities. They provide a managed approach to investing, aiming to optimize returns while minimizing risk through strategic asset diversification.
