What does Balanced mutual fund mean?

A balanced mutual fund is a mutual fund that attempts to somehow balance a low risk investment. The fund achieves this by dividing the investment’s cash among preferred stock, or preference shares, common stock, otherwise known as ordinary shares, and some high yield bonds. Balanced funds, when compared to pure stock funds, also called aggressive growth, perform worse when the stock market is gaining, and better when it is in decline. These balanced mutual funds are basically buying preferred stock, common stock and bonds.