Are bond funds stable and profitable?
Bond funds are not guaranteed to be profitable and are also wealth management products. Not guaranteed, but mostly bonds with high security. Compared with stock funds, bond funds have the advantage of much higher security, but the corresponding rate of return is not very high.
The main investment object of bond funds is bonds, and the most direct factor affecting bond prices is market interest rates. Generally speaking, the bond price is inversely proportional to the market interest rate. Simply put, the higher the market interest rate, the lower the bond price; The lower the market interest rate, the higher the bond price.
Bond funds are divided into the following types:
1 the first category is pure debt funds that cannot invest in the stock market;
The second category is the primary debt base, which can participate in the subscription and issuance of new shares in the primary market, but cannot participate in the secondary market transactions;
The third category is the secondary debt base that can buy and sell stocks in the secondary market;
Other strategic bond funds, such as convertible bond funds.
The difference between bond funds and bonds;
1 bond fund income is not as fixed as bond interest;
Ordinary bond funds have no clear maturity date;
The yield of bond funds is more difficult to predict than the yield of buying and holding a single maturity bond;
The average term of a bond fund is relatively fixed, but the interest rate risk of a single bond will decrease as the term approaches, and the credit risk of a single bond is relatively concentrated, while the bond fund can effectively avoid the higher credit risk that a single bond may face by diversifying its investment.
Summary: Bond fund is a kind of fund that specializes in investing in various bonds. It is essentially a fund, so it is risky. After buying a bond fund, it mainly depends on the changes in market interest rates.