Although the long-term return of bond funds is not very high, the victory lies in stability and low risk. Compared with the stock market, the relatively stable income of bond funds is more valuable to ordinary investors. Today, Bian Xiao will share with you how to invest in bond funds correctly, for your reference only!

For most bond funds, holding for more than one year is basically floating profit, unlike stock funds, which may hold for three to five years or lose money. In the long run, the average income of bond funds is around 5%~6%, which is not high, but the advantage is that the probability of loss is low. For most bond funds, holding them for more than one year is basically floating. So, should we choose long-term or short-term investment in bond funds?

The role of bond funds

First of all, let's make it clear why we choose bond funds.

1, short-term fund management (1-3 years)

One orientation of bond funds is the management of short-term funds.

Index funds need a long investment cycle, and it takes at least 3-5 years of psychological preparation from the beginning of investment to obtaining good returns. But we still have some funds at ordinary times, which may be used for a short period of 1-3 years. This kind of fund is not suitable for investing in index funds, and can be managed by bond funds.

Compared with stock funds or stock index funds, the fluctuation of bond funds is relatively small. If you add the low cost of fixed investment and underestimate the purchase of bond funds, the probability of loss will be greatly reduced in the length of 1-3 years.

Therefore, bond funds are more suitable for the management of short-term funds.

2. As an asset allocation, it can reduce the fluctuation of asset portfolio.

Equity funds and bond funds belong to two types of assets with low correlation. Equity funds are volatile, like a roller coaster, while bond funds are low-volatility assets, which can improve the stability of portfolio returns.

The fluctuation of bond fund itself is relatively small, and the fluctuation of bond is negatively related to the stock market. Negative correlation means that most of the time the trends of the two are opposite.

Therefore, increasing the variety of bonds in the portfolio can reduce the fluctuation of the portfolio.

If you want to build a bond fund portfolio purely, you can take short-term bonds and medium-and long-term pure bonds as the core positions, hold them in heavy positions, and then allocate some secondary bonds and convertible bonds. However, you must pay attention to the fact that the proportion of convertible bond funds should be as low as possible, and it is recommended not to exceed 10%. Since equity positions cannot exceed 20%, the proportion of secondary bonds can be appropriately increased, but it is best not to exceed 20%.

If you want to allocate bond funds in the "stock-debt balance" strategy, it is suggested to choose short-term bonds and medium-and long-term pure bonds, because these bond funds play a stable role in the "stock-debt balance" strategy and there are already stock positions in the portfolio, so you can not allocate or allocate less bond funds with stock positions such as secondary bonds and convertible bonds.

In fact, the investment method of bond funds is very simple. Just choose a bond fund and buy it directly at one time, but this is only for existing funds.

For incremental funds, it is obviously inappropriate to buy at one time, so can you choose a fixed investment? The answer is: Yes, although the income of fixed investment bond funds is not as high as that of one-time purchase, considering that it is not a stock fund, it is also possible to reduce the income and choose fixed investment.

How long should bond funds be held?

Investing in bond funds is simpler than other funds, just remember two sentences: first, choose short-term interest rates at a low level and long-term interest rates at a high level; Second, you can invest at any time. If there is a floating loss, you can add a position to share the cost.

1, the short-term interest rate is low and the long-term interest rate is high.

Because the bond market is greatly affected by interest rates, and the longer the bond fund term, the greater the interest rate. Compared with short-term bond funds, long-term bond funds fluctuate more in bull and bear markets.

Therefore, when the interest rate is generally low, you can choose short-term bond funds or money funds; When the interest rate is high, you can choose a long-term bond fund.

How to judge whether the interest rate is high/low? You can refer to the yield of ten-year government bonds.

Long-term bond funds can be considered when the yield of 10-year treasury bonds is above 3.5%.

When the yield of ten-year treasury bonds is below 3.5%, long-term bond funds are not suitable for investment. If it is less than 3%, you can consider selling long-term bond funds and replacing them with money funds or bank financing.

You can invest at any time. If there is a floating loss, you can increase your position and share the cost equally.

Bond funds also fluctuate, but the fluctuations are relatively small.

So as long as we have demand, we can choose a bond variety and invest at any time. If there are floating losses, you can also add positions appropriately to spread low costs (note that you add positions when the books are floating losses).

In this way, the probability of making money from bond varieties is greatly improved.

Specifically, bond funds can be roughly divided into short-term bond funds and long-term bond funds. Analyze separately.

Short-term bond fund: This is a special bond fund. Most of its investments are bonds with a term of 1 year.

Theoretically, short-term bond funds are also affected by interest rates and are also suitable for investing when interest rates are high. However, the term of the bonds it invests in is relatively short, so in fact, at any point in time, it has been invested for half a year, and there are few records of losses in the past history.

However, it should be noted that if the interest rate is low, for example, the yield of 10-year treasury bonds is less than 3%, then its yield may not be very good.

Short-term debt funds fluctuate and cannot be simply regarded as a substitute for money funds. But its fluctuation is not big, even if it is a bond bear market, the loss is usually within 3%.

Medium-and long-term bond funds: Most bond funds are medium-and long-term bond funds. Long-term pure debt funds fluctuate, and in the bond bear market, there will be a floating loss of about 10%. Therefore, long-term pure debt funds need to invest when they are undervalued, and they should be psychologically prepared to invest 1-3 years.

When investing, you can refer to the yield of ten-year government bonds. The yield of 10-year treasury bonds is greater than 3.5%: at this time, it is suitable to invest in long-term pure debt funds, and it is necessary to be prepared to hold 1-3 years. The yield of 10-year treasury bonds is between 3% and 3.5%: the long-term debt funds bought before can continue to be held. The yield of ten-year treasury bonds is less than 3%: the long-term debt fund you bought before can be sold.

In addition, bond funds generally have three charging methods, among which Class A stands for front-end charging, Class B stands for back-end charging, and Class C does not have subscription and redemption fees, but has sales service fees, so Class A is suitable for large funds, Class B is more suitable for most investors, and Class C is suitable for short-term holding.

Even the best-performing bond fund can hardly compare with passive index and active management fund for a long time, but the fluctuation of bond fund itself is relatively small, the bull-bear market cycle of bond market is relatively short, and the biggest decline is far less than other funds, so it is a relatively low-risk investment product.

Generally speaking, bond funds are low-risk wealth management products, suitable for stable investors, and the investment period is about 1-3 years. It is suitable for asset allocation when the stock market is not good, so as to reduce the income fluctuation of the portfolio.

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