Pure debt funds are funds that invest 100% in bonds. Their risks are relatively small, so they have also attracted the attention of very conservative investors. However, many investors have found that their pure debt funds will fall.

So why do pure debt funds keep falling?

What should I do if pure debt funds keep falling?

We have prepared relevant content for your reference.

Why do pure debt funds keep falling?

When the central bank raises interest rates significantly, it will have a certain impact on these fixed-income securities. The central bank's interest rate hikes mainly promote the rise of market interest rates, and the interest rates in the bond market are composed of market interest rates.

Therefore, when the central bank raises interest rates, bond interest rates are likely to rise, and they will be relatively large, and the trend of bond prices and bond yields is opposite. That is to say, if bond interest rates rise relatively high, then bond prices will also

Falling very low.

Because the coupon interest of a bond is fixed, even if the bond price changes, the coupon interest will not change. Therefore, only when the bond price is relatively low, the interest of buying the bond with the same money will be more, that is,

It is said that interest rates will rise when bond prices fall, and bond prices will definitely fall when interest rates rise. If the central bank raises interest rates significantly, it may cause bond interest rates to rise suddenly, causing bond prices to fall.

For pure debt funds, because most of the funds are invested in bonds, the rise and fall of short-term net worth mainly depends on whether the bond price rises or falls. When bond prices fall sharply, pure debt funds may also fall sharply.

fall.

What should I do if pure debt funds keep falling?

If the bond market is not in good condition and the pure bond fund you purchased has been falling for a long time and has already lost all the profits you made before, then you should consider redeeming it in time to stop the loss and avoid subsequent funds.

Still losing money.

Many people will think that after it falls, it will rise back up. The fund will indeed fluctuate, but if the loss is not stopped in time, the fund will continue to fall and the principal will be lost.

It will be more difficult to earn it back.

It should be noted that the biggest risk of investing in bonds is the risk of default. If the bond defaults, the bond will plummet, and the money invested will be lost. Therefore, when encountering this situation, it is best to

Stop losses in time to avoid the storm, and wait until the subsequent situation stabilizes before considering whether to invest.