Are bond funds risky?
Bond funds are risky, just saying that the risk of bond funds is relatively low. Basically, all funds are risky, just saying that the degree of risk is different, some are high, some are low, and some wealth management products are very low, which leads us to mistakenly think that these wealth management products are risk-free.
We should be clear that low risk and no risk are two different concepts. For example, most people think that bank time deposits are risk-free. In fact, bank deposits are risky. If the deposit exceeds 500,000, when the bank goes bankrupt, the excess will not be compensated. It just shows that our country has strict management of financial institutions, so basically there will be no bank failures, but there are still examples. Bank deposits not only face the risk of bank bankruptcy, but also may be that the rate of inflation exceeds the interest of your deposits, which leads to the depreciation of your bank deposits. Therefore, investment and financial management in the basic listed market are risky, just saying that we can't see some potential risks, and so are bond funds.
The main investment target of bond funds is bonds, accounting for more than 80% in bond funds. In China, bond funds mainly invest in government bonds, financial bonds and corporate bonds.
Because the risk of the investment target of bond funds is relatively small, the risk of bond funds is relatively small as a whole. For example, stock funds invest in stocks, but the volatility of stocks is relatively large, so the risk of stock funds is relatively large. The risk of a fund is mainly determined by the target of its investment, but there are also some other influencing factors, such as the management level of the fund manager and the length of the fund's establishment date.
Is the bond fund yield high?
The expected return of bond funds is not high. The expected return of the fund is mainly determined by the expected return of the fund investment target. The higher the expected return of the investment target, the higher the expected return of the fund as a whole, and there is a direct relationship between them.
But we must be clear that risks and benefits are corresponding, and the higher the benefits, the higher the risks. For example, bond funds and equity funds have different investment targets. Bond funds invest in bonds and stock funds invest in stocks. Relatively speaking, the expected return of stocks is higher than that of bonds, but the degree of loss is also higher than that of bonds, because stocks are more volatile and less stable than bonds. Generally speaking, the expected return of bond funds is higher than that of money funds, which is also because their investment targets are a little different.