Bonds are creditor's rights and debt certificates that the issuer promises to pay interest at a certain interest rate and repay the principal according to the agreed conditions. Traditionally, bonds are the main investment targets, and the proportion of bonds is generally higher than 70%. Apart from the different definitions, do you know the difference between bonds and bond funds?

What's the difference between bonds and bond funds?

1 Income is different.

If you buy a bond with a fixed interest rate, you will get a fixed interest income regularly after purchase, and the principal can be recovered when the bond expires; As a combination of different bonds, bond funds will distribute income to investors regularly, but the income distributed by bond funds has risen and fallen, which is not as good as the fixed interest of bonds.

Two different risks

As the maturity date of a single bond approaches, the interest rate risk will be reduced and the credit risk will be concentrated. Bond funds have no fixed maturity date, so the interest rate risk they bear will depend on the average maturity date of the bonds they hold, and the credit risk is relatively dispersed.

3 different due dates

General bonds have a clear maturity date; Bond funds are composed of a group of bonds with different maturity dates, so there is no definite maturity date.

The above analysis of the difference between the two from three aspects, I hope this answer will help you.