Bond funds are divided into pure debt funds and mixed debt funds, among which mixed debt funds are divided into first-class and second-class. The differences between them are as follows:

1. The investment targets are different. On the basis of investing in fixed-income financial products, Tier 1 bond funds can also invest in bonds and new shares in the primary market, but they do not participate in stock trading in the secondary market. On the basis of investing in fixed-income financial products, secondary bond funds can not only participate in the trading of stocks in the secondary market, but also participate in the investment of new shares in the primary market.

2. The investment scope is different. Primary bond funds mainly invest in pure bonds and new shares in the primary market, while in the secondary market, besides pure bonds and new shares, there are no more than 2% positions that can be invested in the secondary market to directly buy and sell stocks, and the investment scope of secondary bond funds is wider than that of primary bond funds.

3. The asset allocation is different. The position allocation of tier-one bond funds is to combine bonds with high expected returns to make new shares; The position allocation of secondary bond funds is high expected return bonds, new shares and selected stocks. The asset allocation of secondary bond funds has one more stock option than that of primary bond funds.

4. Risks and benefits are different. The primary bond fund mainly invests in the low-risk bond market and some new shares, while the secondary bond fund invests not only in the low-risk bond market, but also in the high-risk stock market. The investment risk of secondary bond funds is higher than that of primary bonds, and correspondingly, the income of secondary bond funds is higher.

5, suitable for different objects. First-class bond funds are suitable for conservative investors who pursue stable returns; Secondary bond funds are suitable for investors with low-risk preference who want to pursue higher investment returns. Due to the characteristics of asset allocation, secondary bond funds are flexible to adjust in market fluctuations and have strong anti-risk ability.

Risk of bond funds:

1. Interest rate risk. The price of bonds is affected by the fluctuation of market interest rates. Market interest rate rises, and most bond prices fall; Market interest rates fell and most bond prices rose. Generally speaking, the longer the maturity of bonds, the greater the impact of market fluctuations on bond prices. By analogy, bond funds take bonds as the main investment target, and their value is also affected by market fluctuations. The longer the maturity date of bond funds, the greater the impact of market fluctuations.

2. Credit risk. Credit risk refers to the risk of default by the bond issuer. If the bond issuer is in poor economic condition, it can't pay interest on time or accept the bond due, the bond will face high credit risk. If bond rating agencies's credit rating of a bond becomes lower, the bond fund holding the bond assets will suffer from the impact of credit risk, resulting in a decrease in the net value of the fund.

3. Early redemption risk. If the issuing company is in good operating condition or has a financing channel with lower interest rate, it may repay the high-interest bonds in advance, and the fund holding the bonds with early redemption rights will not only be unable to obtain high-interest income, but also face the risk of reinvestment.

4. Inflation risk. Inflation will reduce the purchasing power of money, so will the value of money. Investors in bond funds should not ignore the impact of inflation, and should make portfolio allocation to make the rate of return outperform the inflation rate.