Speaking of funds, many people may have heard of them, but they don't know much about the types of funds. Some people like mixed funds, while others like less risky funds. Today, we are going to tell you the basics of bond funds. Bond funds are relatively mild compared with aggressive equity funds (which rise and fall with stock market fluctuations). Bond funds generally belong to low-middle risk, and more often they rise and fall with interest rates.

Bond fund meaning:

Bond funds, also known as bond funds, refer to funds that specialize in investing in bonds. By concentrating the funds of many investors, we can make portfolio investment in bonds and seek relatively stable returns.

Types of bond funds:

Bond funds are divided into government bond funds, municipal bond funds, corporate bond funds and international bond funds according to the types of bonds invested. Bond funds are divided into treasury bonds, credit bonds and convertible bonds according to investment targets.

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. In addition, bond funds can also put a small amount of money into the stock market. In addition, investing in convertible bonds and issuing new shares are also important channels for bond funds to obtain income.

Influencing factors of bond funds:

Generally speaking, interest rate and credit risk are two major factors that affect the performance of bond funds. Details are as follows:

1, interest rate risk, that is, the sensitivity of the invested bonds to interest rate changes (also called duration),

2. Credit risk. When choosing a bond fund, we must understand its interest rate sensitivity and credit quality. On this basis, we can understand how high the risk of the fund is and whether it meets your investment needs.