Pure debt funds are a relatively safe type of investment among investment funds and are suitable for robust investors with low risk tolerance. All their investment directions are bonds, which can better meet the safety needs of investors. So what is pure debt funds?

Debt funds?

What are the risks of pure debt funds?

Let’s talk together today.

1. What is a pure debt fund?

Pure debt bond funds are funds whose main investment objects are financial instruments with fixed expected returns such as treasury bonds and financial bonds. They are called bond funds.

Because the expected returns of the products it invests in are relatively stable, it is also called a "fixed expected return fund."

2. Risks of pure bond funds 1) Compared with general bond funds, pure bond funds do not invest in stocks, and their investment direction is 100% bonds; but at the same time, because bonds are fixed expected return products, they have the investment characteristics of bond funds

Risk, but less than the risk of general bond funds.

2) Pure debt funds have different expected income capabilities and different expected income levels. Since they cannot invest 20% of other markets to obtain value-added like other funds, their expected income levels are low. For prudent investors, expected

The income return is too low, does not meet the expected income expectations, and the expected income risks increase.

3) Due to the low expected return, relatively satisfactory expected returns can only be obtained by holding for a longer period of time. Therefore, long-term holding generally increases the value, so the liquidity is also increased to a certain extent.

4) Although pure debt funds are very safe, the market is unpredictable. If the market bond price drops significantly or the bond issuer has problems and cannot operate transactions normally, it will also bring investment and credit risks.

That’s all the above about what pure debt funds are and the risks of pure debt funds. I hope it will be helpful to everyone.

Warm reminder, financial management is risky, so investment needs to be cautious.