If your business is making a profit, you want to ensure that you grow it in the best possible way. And that could lie in achieving diversification whilst cashing in on returns and protecting your capital along the way.
Global Balanced Funds have become a well-known investment option for some businesses. If you want to create an additional source of returns for your business, you have excess cash available, and you can afford to reinvest in the business, but there are no good capital or R&D investments to make at this point, then it could be for you.
However, it’s important to note that you should always consult a professional financial adviser to help you understand and choose the right solution for you.
We discuss what it entails, its benefits, risks, and how to make it work for you.
The Allure of Striking a Balance
In the investment world, it’s generally considered that the higher the risk of loss, the higher the long-term return you could expect from the investment.
Therefore, when deciding on a unit trust, you need to consider the balance of the return you could need with the risk you’re taking to lose some of your capital.
Global Balanced Fund at a Glance: Balancing Risk and Return
When it comes to balanced funds, it can be explained as an investment “sweet spot”. For example, Global Balanced Funds generally exist to potentially help build steady, long-term growth for investors.
They do this by trying to balance both the flexibility and discretion to choose individual securities across asset classes to achieve the ultimate goal.
Is a Global Balanced Fund Perhaps Right for Me?
- Its goal is to reach higher long-term returns.
- It can employ limited stock market hedging to reduce some risk of loss potentially.
- Invests in fixed income, global equities, and other commodity-linked instruments.
Key Considerations When Building a Global Balanced Fund
When asset managers build a Global Balanced Fund, it’s not just about asset classes but also about individual factors that might correlate in the portfolio to ensure the full package whilst managing risk.
People set market prices, and people aren’t predictable. Therefore, a mathematical equation cannot always solve the problem. Emotions such as fear or greed often influence people, driving too low or high asset prices. And this is where asset managers come in. They can manage Global Balanced Funds by taking the emotion out of it and using rational insight to make the best choices.
Suppose you’re interested in getting a good return from investing your business profits offshore, but you also want to protect your capital along the way. In that case, a Global Balanced Fund could potentially be for you. However, it’s always the best idea to consult professional financial advice to help find the correct solutions for your business.