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B

Balanced Funds

A type of fund which restricts its investment in *equities*, to a maximum of 85% of the fund’s holdings.  The remainder can then be invested in other types of investments such as *bonds*. This type of fund aims to benefit from the performance of its other  investments when equities are not performing well and vice versa.

Benchmark index

A *stock market index*, such as the *FTSE 100*, which is used by *fund managers* as a standard to measure the overall performance of their funds. Fund managers try to outperform any gains made by their fund’s *benchmark index*.

Bid price

*Unit trusts* and *OEICs* can have separate prices for buying and selling *units*/*shares*.  Such funds are known as *dual-priced*.  The bid price is the price at which units/shares are sold and are lower than the offer or buying price.

Bid/Offer spread

For *dual-priced* funds this is the difference between the buying and selling prices of your *units*/*shares*. The buying or *offer* price is normally higher than the selling or *bid* price as it will include an *initial charge* to be paid to the *fund manager* for setting up and administering your units/shares. 

Blue chip

Large well established companies which are generally considered to be stable. In the UK, such British companies are usually listed on the *FTSE 100* index.

Bonds

Also known as *fixed interest securities*, bonds are investments which pay a fixed rate of *interest* and have a fixed term. Governments or companies may issue them. Those issued by Governments are known as *gilts*. Not to be confused with investment bonds issued for individual investors usually by insurance companies.