1. Bond funds not only invest in government bonds, but also have local bonds and corporate bonds. If an enterprise has a debt crisis and cannot pay it at maturity, which is equivalent to an investment loss, the bond fund will fall.
2. Bond funds will also invest in transactional bonds. The price of trading bonds is variable. When the cost of a fund manager is higher than the current price, it means a loss.
Generally speaking, the risk of bond funds is relatively small, but there may be losses, and the fund company will not protect the principal and interest.
Bonds are securities issued by debtors such as governments, enterprises and banks in accordance with legal procedures in order to raise funds and promise creditors to repay the principal and interest on a specified date.
Bond/debenture is a kind of financial contract, which is a debt certificate issued to investors when the government, financial institutions and industrial and commercial enterprises directly borrow money from the society and promise to pay interest at a certain interest rate and repay the principal according to the agreed terms.
The essence of a bond is a certificate of debt, which has legal effect. There is a creditor-debtor relationship between bond buyers or investors and issuers. Bond issuers are debtors and investors (bond buyers) are creditors.
Extended data:
Although there are many kinds of bonds, they all contain some basic elements in content. These elements refer to the basic contents that must be stated in the bonds issued, and are the main agreements that clarify the rights and obligations of creditors and debtors, including:
1. Bond face value
The face value of bonds refers to the face value of bonds, which is the principal amount that the issuer should repay to the bondholders after the maturity of bonds, and is also the calculation basis for enterprises to pay interest to bondholders on schedule. The face value of bonds is not necessarily the same as the actual issue price of bonds. If the issue price is greater than the face value, it is called premium issue; If it is lower than the face value, it is called discount; And if it is equivalent, it is called parity issue.