Although the long-term returns of bond funds are not very high, they are stable and have low risks. Compared with the stock market, the relatively stable returns of bond funds are even more valuable for ordinary investors. For most bond funds, holding for more than one year is basically a floating profit, unlike stock funds, which may be held for three to five years or lose money.

In the long run, the average return of bond funds is about 5%~6%, which is not high in fact, but the advantage lies in the low probability of loss. For most bond funds, they will basically float after holding for more than one year. So, should we choose long-term or short-term investment in bond funds? The role of bond funds

First of all, we should make clear why we choose bond funds

1. Managing short-term funds (1-3 years)

One orientation of bond funds is managing short-term funds.

Index funds need a long investment cycle, and it takes at least 3-5 years to be psychologically prepared from the beginning of investment to obtaining good returns. But we still have some funds at ordinary times, which may be used in a short period of 1-3 years. Such funds are not suitable for investment 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 combined with the decline in fixed investment and low cost, and underestimated the purchase of bond funds, the probability of losses in 1-3 years will be greatly reduced.

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

2. Reduce the volatility of the portfolio as an asset allocation

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

The fluctuation of bond funds is relatively small, and the fluctuation of bonds is negatively correlated with the stock market. Negative correlation means that most of the time the trends of the two are opposite.

Therefore, adding bond varieties to the portfolio can reduce the volatility of the portfolio.

If you want to build a bond fund portfolio, you can take short-term debt and medium-and long-term pure debt as core positions and hold them in heavy positions, and then allocate some secondary debt 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 1%. As equity positions cannot exceed 2%, the proportion of secondary debt can be appropriately increased, but it is best not to exceed 2%.

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 already have 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.