There are many investors who have just entered the investment fund. Because the general investment targets of bond funds are products with fixed expected returns, there will be no risk and no possibility of loss by default. In fact, this investment idea is biased. As long as it is an investment, there will be risks, and even bond funds may lose money. Then why do bond funds lose money?

1. Reasons for bond repurchase

During the bond investment period, the investment manager repurchases the bonds that can be repurchased in the bond repurchase market and invests the obtained funds in other investment directions. In this way, a certain trading leverage is generated, and the funds are recovered after the term expires.

However, this kind of trading leverage faces huge risk of price fluctuation. When the bond price rises, fund share holders can get additional expected income, and the increase of expected income also indicates the increase of wind, thus increasing the possibility of loss.

2. Some bond funds bet part of their funds on convertible bonds.

The fund manager will invest some funds in the direction of convertible bonds. Due to the stock market downturn, the price of convertible bonds fell, resulting in fund losses. Bond funds are bought and sold according to the price of bonds, which are generally fixed coupon rate. The change of interest rate makes the bond price negatively related to it. Interest rates go down, bond prices go up, the current situation of interest rates is relatively low, and the potential for bond prices to rise is also low. Thereby increasing the possibility of bond fund losses.

3. The company's own credit risk has increased.

Fund companies will choose relatively stable bond funds when investing in bonds. However, some fund companies have high credit risk or financial risk, so the risk of their managers investing in bond funds will also increase. When the company is insolvent, merger, bankruptcy, etc. The risk of bond funds will be greatly strengthened.