What does a leveraged bond fund mean?
Leveraged bond fund is a main type of leveraged fund. It is a fund that magnifies the rise and fall of the parent fund. Leverage index funds in China stock market are all aggressive Class B shares of graded bond funds. It is a high-risk and high-expected return variety with leverage.
Because the expected return of leveraged bond funds is generally stable and safe; Therefore, many fund managers will leverage bond funds in order to improve their expected returns. So, what are the advantages of leveraged bond funds?
What are the advantages and risks of leveraged bond funds?
superiority
Realizing the enhancement of expected returns is the fundamental purpose of adding leverage to bond funds, and leveraged bond funds have indeed realized the appreciation of expected returns to a certain extent, expanding the effect of expected returns.
danger
1) leverage will not only expand the expected return effect, but also expand the risk. If the fund doubles, the loss may also double. Leverage risk is a high-risk factor that cannot be ignored;
2) Leveraged bond funds are generally operated by fund managers. If the fund manager does not operate properly, it will also bring risks.
So much for the significance and advantages of leveraged bond funds. I hope everyone will weigh the pros and cons and help the investment. Warm reminder, financial management is risky and investment needs to be cautious.