Bond funds are divided into pure debt, primary debt base and secondary debt base, which investors need to see clearly when purchasing.
Pure debt fund is a fund that specializes in investing in bonds, which are issued by enterprises and countries. Everyone has a characteristic: there is a certain period, and the principal and interest will be returned at maturity, and the interest is higher than the bank deposit. Therefore, the risk of buying a pure debt fund is not great, and its biggest risk is that it cannot keep up with the inflation rate.
The primary debt base refers to the non-pure debt bond fund that invests in the primary stock market, that is, the general fund that plays new shares. Generally speaking, it is a bond fund that mainly invests in bonds and does not participate in the secondary market. You can refer to the fund contract to determine whether the fund is a primary debt base. The risk of this kind of debt base is higher than that of pure debt base and lower than that of secondary debt base; The expected annualized expected return is higher than the pure debt base and lower than the secondary debt base.
The secondary debt base is a bond fund, which not only participates in the stock trading in the secondary market, but also participates in the new stock investment in the primary market. You can refer to the fund contract to determine whether the fund is a secondary debt base.
The difference between bond funds and monetary funds:
First, the investment targets are different. Bond funds mainly invest in bonds, and some can also invest in stocks; Money funds mainly invest in short-term securities in the money market, such as treasury bills, negotiable certificates of deposit of large banks, commercial papers and corporate bonds.
Second, risks and benefits are different. The risk of bond fund is higher than that of money fund, and the expected return is also higher; Money funds are almost risk-free, so their returns are low.
Third, the purchase cost is different. Bond funds generally have subscription fees and redemption fees except for a small part of subscription fees and redemption fees; Monetary funds do not charge subscription/subscription fees and redemption fees.
Fourth, the arrival time is different. The redemption time of short-term debt funds is the same as that of money funds, and the redemption time of ordinary bond funds is T+5 working days; The redemption time of the monetary fund is T+2 working days. Bond funds have higher returns than money funds, but they also have higher risks.