1, classified by investment target
In China, bond funds mainly invest in government bonds, financial bonds and corporate bonds. Because the expected annualized expected return of the products it invests in is relatively stable, it is also called "fixed income fund".
National debt: government bonds issued by the central government to raise financial funds. It is a debt certificate issued by the central government to investors, promising to pay interest and repay the principal within a certain period of time. Subject and purpose: The central government makes up the national fiscal deficit, or raises funds for some costly construction projects, some special economic policies and even wars. The risk is the least (guaranteed by the credit and tax of the central government) and the income is the least (generally higher than the expected annualized interest rate of bank savings deposits in the same period).
Financial bonds: bonds issued by banks and non-bank financial institutions. Subject and purpose: Banks and non-bank financial institutions raise funds with greater risks (greater than treasury bonds and savings deposits, less than corporate bonds) and higher returns (lower than corporate bonds and higher than treasury bonds and bank savings deposits).
Corporate bonds: bonds issued by enterprises in accordance with legal procedures and agreed to repay the principal and interest within a certain period of time. Subject and purpose: The enterprise has the greatest risk of raising funds and the highest income.
2. Proportional bonds.
According to the proportion of investment in stocks, bond funds can be divided into pure bond funds and partial debt funds. The difference between the two is that pure debt funds do not invest in stocks, while partial debt funds can invest in a small number of stocks. The advantage of the partial debt fund is that it can flexibly allocate assets according to the trend of the stock market and share the opportunities brought by the stock market while controlling risks.