Investing in so-called balanced mutual funds, combining equities and fixed income, makes sense at a time when interest rates about to rise and stock markets are retrenching, the head of Toronto Dominion Bank's mutual fund unit said on Friday.
Balanced funds have been the investment vehicle of choice for TD clients in the face of headwinds across the spectrum of asset classes, said Thomas Dyck, president of TD Mutual Funds, Canada's No 4 mutual fund company. "A balanced fund or a more balanced approach is probably a good way for most investors to deal with managing these risks," he said, pointing out that investors appear to be undeterred by the recent slide in share prices.
The flow of money into long-term mutual funds at the TD unit has stayed strong even though the market has wiped out nearly all of the gains rung up by the Toronto Stock Exchange's main index since late November. "We are seeing very, very strong long-term fund growth in the first half of the year and that continues into as recently as last month," he said.
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