What is the annualized rate of return of bond funds?
Between 6% and 8%, the annualized income of bond funds is not fixed, but the income of most bond funds is between 6% and 8%. When the market is good, the yield of bond funds is around 10%, with a maximum of 20%. When the market is bad, the yield of bond funds is generally around 4%, and the yield is between 6% and 8% most of the time.
The data shows that during the period from 2006 to 2020 15, the average annual return of bond funds 14 was positive, with an annualized rate of return of 6.75%. However, by 2022, because of the bad overall environment, interest rates fluctuated greatly, and bond funds also plummeted.
Bond fund income mainly comes from four aspects:
1 interest income: the coupon interest income of the bond itself is the interest paid by the borrower, including the central government, local governments, financial institutions, listed companies and enterprises.
2 Market fluctuation income: bond trading is similar to stock trading, and it is also influenced by people's emotions and surrounding markets. The price fluctuates, but the fluctuation of bonds is smaller than that of stocks.
3 Leveraged income: In order to increase income, fund managers sometimes use the bonds in their hands for leveraged pledge financing, and the obtained funds continue to be invested in the bond market, thus obtaining leveraged income.
4 Stock returns: Some bond funds participate in stock innovation and hold some stocks, such as primary debt and secondary debt, which can obtain excess returns by buying and selling stocks.
Bond funds are funds that mainly invest in bonds. It is stipulated that more than 80% of fund assets are invested in bonds, and a small amount of funds can also be invested in stock market, convertible bonds and new shares.
Bond funds belong to wealth management products and do not guarantee principal and interest. In addition, every investor has different risk preferences. We should learn to correctly choose products that meet our risk tolerance and investment objectives.