Fixed income fund, as its name implies, is a fund with relatively fixed income. At present, there are two kinds of fixed income funds, and there are differences between them. So what's the difference between these two types of fixed income funds?

What's the difference between two fixed income funds?

The two kinds of fixed income funds in financial management are pure debt funds and short-term debt funds, which are quite different in investment characteristics and risk coverage. Relatively speaking, pure debt funds are more risky and have higher returns than debt funds, but they just need to bear more credit risks and interest rate risks.

1. Pure debt funds mainly invest in some excellent corporate bonds and other bonds in the market, and gradually determine the portfolio type according to the credit rating of bonds to ensure that bonds have very stable returns. Short-term bonds mainly invest in some low-risk fixed-income bonds, usually investing in some government bonds and local government bonds.

2. The main risks of pure debt funds are credit risk and interest rate risk. Usually, the issuer of bonds cannot repay the principal of bonds for some reason, which leads to the depreciation of funds, which is credit risk. Interest rate risk means that the change of interest rate affects the bond price and leads to the fluctuation of the fund's net asset value. For short-term debt funds, although deposit funds are more risky, they can get higher returns.