Definition and structure of bond fund
Ordinary bond funds are mutual funds established and managed by fund companies, which invest in various bonds. The portfolio of bond funds usually includes bonds, corporate bonds and convertible bonds. Fund companies will choose appropriate bonds according to the investment objectives and strategies of the fund to achieve a high-yield and low-risk investment portfolio.
The structure of ordinary bond funds is similar to other * * * funds. After investors buy fund shares, the fund company will invest in proportion to the investors' shares. The income of the fund is realized by paying interest on bonds and appreciating bond prices.
2. Advantages of ordinary bond funds
Compared with other investment tools, ordinary bond funds have the following advantages:
(1) Stable income: The main income source of bond funds is the interest payment of bonds, so it is relatively stable. Bond fund is an ideal choice for investors who want to obtain stable income.
(2) Capital preservation and appreciation: Bond funds invest in the bond market, and the risk is lower than that in the stock market. When the economy is depressed or the stock market fluctuates greatly, bond funds can help investors maintain and increase their value.
(3) Diversification of investment risks: general bond funds invest in bonds of different types and issuers to diversify their portfolios. This can reduce the loss caused by the default of a single bond or other risks.
3. Risks of ordinary bond funds
Although the risk of ordinary bond funds is lower than other investment tools, there are still some risks:
(1) Interest rate risk: Bond prices are negatively correlated with market interest rates. Interest rates rise and bond prices fall, which may lead to a decline in the net value of bond funds.
(2) Credit risk: Some bond issuers may face the risk of default, especially some bonds with low credit rating. This may lead to a decline in the income of bond funds.
4. How to choose ordinary bond funds?
When choosing a suitable ordinary bond fund, the following factors need to be considered:
(1) Experience and performance of fund managers: Choosing a fund manager with rich experience and good management performance can improve the probability of successful investment.
(2) The fund's investment strategy and risk control ability: Understand the fund's investment strategy and risk control ability to ensure that it matches its own risk tolerance.
(3) Fees and fee structure: Understand the fund's management fees, sales fees and other expenses, and choose a fund with reasonable fees.
5. Applicable groups of ordinary bond funds
Ordinary bond funds are suitable for investors who want to maintain and increase their value through stable income and low risk. Especially suitable for retirees, conservative investors or investors seeking stable income.
Summary:
Ordinary bond fund is a kind of fund that invests in the bond market and gains income by buying various bonds. It has the advantages of stable income, capital preservation and appreciation and risk diversification, but it also faces interest rate risk and credit risk. Choosing a suitable common bond fund needs to consider the fund manager's experience and performance, investment strategy, risk control ability and cost. For those investors who want to obtain stable income, ordinary bond funds are an ideal investment choice.