What is the annualized rate of bond funds?
Roughly between 3% and 8%, the annualized rate of return of bond funds is not fixed, mainly depending on the bond income of investment. Statistics show that the long-term annualized rate of return of short-term debt funds is 3%-4%; The long-term annualized rate of return of long-term debt funds is 5%-6%; The long-term annualized income of secondary bond funds including stock investment is 7%-8%; The long-term annualized income of pure debt funds is around 5% to 7%.
Bond funds are funds that mainly invest in bonds (the bond position is required to be above 80%), and funds that mainly invest in fixed-income financial instruments such as government bonds and financial bonds are also called fixed-income funds because the income of the products they invest in is relatively stable.
Bond funds seek stable returns by pooling the funds of many investors and making portfolio investments in bonds. The income mainly comes from coupon income and capital gain, including the income brought by price fluctuation and leverage income.
Suitable investors for bond funds:
1 people with low risk tolerance: people who want to get relatively stable income every year and can't bear the big loss risk.
2 People who have certain positions in stock/stock funds: From the perspective of asset allocation, allocate bond funds to hedge with stock funds to reduce the losses caused by stock decline.
Before buying a fund, you can make a risk assessment. If the ability to take risks is not high, then it is recommended to choose money funds and bond funds. These two types of funds have high security, but the disadvantage is that the income space is limited and the principal is not guaranteed.