In the investment field, many people choose bond funds as one of the investment tools. Bond fund is an investment tool that obtains fixed income by investing in bonds. The yield of bond funds is closely related to the yield of national debt. It will be introduced in detail below.
The influence of the yield of government bonds on bond funds The yield of government bonds is one of the important indicators in the bond market. The yield of bond funds is usually closely related to the yield of government bonds. As the yield of government bonds rises, so will the yield of bond funds. This is because the bond interest rate invested by bond funds is fixed. When the market interest rate rises, the interest rate of newly issued bonds will also rise, which will reduce the market value of bonds held by bond funds, but the interest rate of bonds invested by bond funds will remain unchanged, so its yield will increase relatively.
On the contrary, when the yield of government bonds falls, the yield of bond funds will also fall. This is because when the market interest rate drops, the interest rate of newly issued bonds will also drop, which will increase the market value of bonds held by bond funds, but the interest rate of bonds invested by bond funds will remain unchanged, so its yield will decrease relatively.
The influence of the yield of national debt on the risk of bond funds is not only reflected in the yield, but also reflected in the risk of bond funds. As the yield of government bonds rises, the risk of bond funds will also rise. This is because when the market interest rate rises, the interest rate of newly issued bonds will also rise, which will reduce the market value of bonds held by bond funds, thus increasing the risk of bond funds.
On the contrary, when the yield of national debt declines, the risk of bond funds will also decline. This is because when the market interest rate drops, the interest rate of newly issued bonds will also drop, which will increase the market value of bonds held by bond funds, thus reducing the risk of bond funds.
The conclusion is inseparable, and the rise and fall of the yield of national debt directly affects the yield and risk of bond funds. When investing in bond funds, it is necessary to pay close attention to the change of the yield of government bonds, so as to judge the investment value and risk of bond funds.