Among the fund products, bond fund is an important fixed-income product, which is often chosen by investors. Shrinking the table and raising interest rates are both tight monetary policies, which have a great impact on the bond market. The bond price and coupon rate constitute the value of the bond, and the coupon rate of the bond is the actual annual reward that investors should get from holding the bond to the maturity date.

The impact of interest rate increase on bond funds is as follows:

After raising interest rates, the coupon rate of bonds will increase, and raising interest rates will lead to a decline in bond prices. Simply put, raising interest rates is not good for bond funds. In the expectation of raising interest rates and in the early stage of raising interest rates, the bond price in the market will drop, the net value of bond funds will drop or the yield will drop. For investors who have already bought bond funds, they should first pay attention to the portfolio announced by the fund, and then control the investment duration of the fund at a relatively low level.

The adjustment of interest rate increase has the most direct impact on funds, which is manifested in the impact on monetary funds or bond funds. The rise in interest rates leads to a decline in the yield of medium and long-term bonds. When the Fed implements the policy of raising interest rates or shrinking its balance sheet, other countries will also be forced to raise interest rates or shrink their balance sheets. For wait-and-see funds, if investors cannot hold bond funds for a long time, they should be cautious in investing in bond funds.

In the fund market, the rise in interest rates will lead to a decline in the yield of medium and long-term bonds. If investors want to include bond funds in their portfolios, they should focus on funds that invest in short and medium-term bonds. If you hold a large proportion of long-term bonds, or a fund with long-term bonds, the yield will definitely drop sharply.