Bond funds, also known as bond funds, refer to funds that specialize in investing in bonds. By pooling the funds of many investors, it makes portfolio investment in bonds and seeks stable expected returns. According to the classification standard of China Securities Regulatory Commission, bond funds refer to funds with more than 80% of fund assets invested in bonds.

After understanding the meaning of bond funds, Bian Xiao will tell you the advantages and disadvantages of bond funds. It is said that knowing ourselves and knowing each other is invincible, and better understanding the advantages and disadvantages of bond funds can make more reliable investments.

Advantages of bond funds:

1. Ordinary investors can easily participate in investment in products such as inter-bank bonds, corporate bonds and convertible bonds. These products have various inconvenient restrictions on small funds, and buying bond funds can break through this restriction.

2. When the stock market is depressed, the expected return of bond funds is still very stable and is not affected by market fluctuations. Because the expected return of products invested by bond funds is very stable, the expected return of corresponding funds is also very stable. Of course, this also determines that their expected return is subject to the interest rate of bonds and will not be too high. The historical annual interest rate of corporate bonds is about 4.5%. After deducting the operating expenses of the fund, the historical expected annual rate of return can be guaranteed to be between 3.3% and 3.5%.

Bian Xiao believes that the biggest advantage of bond funds is low risk and stable expected returns.

Disadvantages of bond funds:

1. Only if you hold it for a long time can you get a relatively satisfactory expected return.

2. When the stock market skyrockets, the expected return remains stable at the average level, which is lower than that of equity funds. When the bond market fluctuates, there is even the risk of loss.

The disadvantage of bond funds is that it takes a long time to get satisfactory results and the expected return is not high enough. There are many kinds of bond funds, and investors can choose bond funds that meet their own needs according to the credit rating of bonds.