Today, when the concept of financial management is deeply rooted in people's hearts, more and more friends start to buy funds, financial products or stocks. Some friends found that there are two kinds of bond-related funds when choosing funds, one is convertible bond fund and the other is bond fund, which look very similar. Because many friends still don't know the difference between convertible bonds and bond funds, Xi Cai Jun will introduce the difference between them here.

Simply put, the difference between convertible bond funds and bond funds is mainly concentrated in two aspects, one is the difference of investment objects, and the other is the difference of stability.

Different investment objects

The main investment objects of convertible bonds fund are convertible bonds, while the main investment objects of bond funds are government bonds, financial bonds and corporate bonds. Here, Xi Cai Jun will introduce you to what convertible bonds are.

Convertible bonds are bonds that bondholders can convert into common shares of the company at an agreed price at the time of issuance. If the holder fails to exchange shares within the prescribed time limit, he can collect the principal and interest at maturity or sell them in the secondary market for realization.

Different stability

Because the convertible bonds held by the convertible bond fund have the right to be converted into stocks, the convertible bond fund can get a higher return on investment when there is a big bull market in stocks. Compared with convertible bond funds, the expected return of bond funds is relatively stable.

The goal is different. Convertible bond fund investment is different from convertible bonds. Convertible bonds not only have the nature of repaying principal and interest of ordinary bonds, but also can be converted into stocks during the conversion period, and can also be sold in the secondary market to obtain income. Risk and reward are different. Convertible bonds can be traded in the secondary market, and the price will fluctuate with the stock market, with great potential fluctuation, while the fluctuation of ordinary bonds is relatively small, so the fund risk and income of convertible bonds are higher than that of ordinary bond funds. The quantity is different. In Public Offering of Fund market, the number of convertible bond funds is less than that of ordinary bond funds. In fact, most convertible bond funds do not allocate all their assets to convertible bonds. In order to ensure their convertible bond investment style, most of them will limit their investment positions.