Balanced Funds Don’t Inspire Fear or Greed. That’s Why They Are So Useful.

The balanced fund is the vintage bicycle of investing.

It may be old fashioned — the first balanced fund, Vanguard Wellington, began in 1929, while a precursor of the modern bike was patented in 1866 — but it endures because of its sturdy simplicity and its sheer usefulness.

And the old balanced fund is lately finding new fans. Since 2013, investor money has sloshed in, with the total assets in balanced funds swelling about 70 percent, to $1.7 trillion, according to EPFR Global in Cambridge, Mass. In an age of ever-more-complicated mutual funds and exchange-traded funds, based on arcane strategies and obscure indexes, these folks are betting on the original set-it-and-forget-it investment.

A balanced fund invests in both stocks and bonds. It is balanced inasmuch as its traditional asset allocation is about 60 percent stocks and 40 percent bonds and cash, with the stocks providing return and the bonds reducing risk.

Russel J. Kinnel, director of manager research for Morningstar, said he once dismissed balanced funds as obsolete but has come to appreciate them.

“People do pretty well in balanced funds because balanced funds tend not to inspire fear or greed,” he said.

Balanced offerings can be actively managed, like Vanguard Wellington, T. Rowe Price Balanced, Mairs & Power Balanced or Oakmark Equity and Income, or indexed and passively managed, like the Vanguard Balanced Index Fund or iShares Core Growth Allocation E.T.F.

They can hew mostly to domestic securities, as does Vanguard Balanced, or they can bet bigger on international markets, as does T. Rowe Price Balanced. They’re widely available — many large fund families offer them, including American Funds, BlackRock and Fidelity.

Balanced funds’ virtue is that their stodgy construction discourages investors from defeating themselves, Mr. Kinnel said.

Morningstar analyzes how mutual funds’ returns compare with those of the investors in those funds. Even when funds post good numbers investors don’t necessarily reap the same returns, he said. That’s because many people tend to buy and sell willy-nilly, jumping in when the market soars and bailing out when it crashes, rather than buying and staying put.

But people in balanced funds tend to be patient, helped by the funds’ smoother performance. As a result, the investors’ actual returns are more likely to match those of their funds.

In the 10 years through March, for example, investors in balanced funds, on average, had an actual asset-weighted 5.93 percent annualized return, according to Morningstar. That was better than the 5.63 percent annualized total return of those same funds, indicating that balanced fund investors typically avoided maladroit timing.

For mutual funds over all, the situation was reversed. Actual investor returns were 5.53 percent annualized, compared with a 5.79 percent total return for the funds. That shows that, in most other funds, investors had smaller returns because they bought high and sold low.

Jennifer Lane, a financial planner at Compass Planning Associates in Boston, said she recommends balanced funds because they really do encourage patience and prudence.