Compared with stocks, the risk of investing in bonds is lower, and bond funds are not as volatile as stock funds.

However, if the stock price falls, there will still be money left. If the bond defaults, the principal will not be recovered.

No, the "18 Kangde New SCP001" bond that was redeemed on January 15 failed to repay the principal and interest in full on time, constituting a substantial breach of contract.

So, when buying bond funds, how can you avoid being caught in a trap?

Bond Classification First, we need to understand the types of bonds.

According to the type of risk, bonds are divided into interest rate bonds and credit bonds.

Interest rate bonds are backed by the state or government, have a high credit rating, and are unlikely to borrow money without repaying it. Its price changes are greatly affected by interest rates. Typical representatives include national bonds, local government bonds, policy financial bonds, etc.; credit bonds are divided into

The entities behind corporate bonds and corporate bonds are all enterprises, and there is no national credit guarantee.

If the company's operating conditions deteriorate or other problems arise, the credit bonds will be at risk of default.

How to avoid going under the radar when buying bond funds?

Generally speaking, bonds have credit ratings, such as AAA-rated bonds, which have the highest credit rating and the lowest interest rates.

Companies with poorer credit will have to pay more interest when issuing bonds before they can sell them.

If we buy a bond fund, it is difficult to guarantee that we will not step into a trap unless we choose a fund that only invests in interest rate bonds, as the default probability of such bonds is much smaller.

How to tell whether a fund invests in interest rate bonds?

In fact, it can be easily seen from the fund holdings. For example, if there are the words "Treasury Bonds" and "China Development Bank", it means that the fund has invested in national bonds or China Development Bank Bonds (a type of policy financial bonds); for example, if there are "bank", "

The words "SPD" and "CITIC" indicate that the fund mainly invests in bonds issued by banks. The bank's credit rating is relatively high and the probability of default is very small.

In addition to looking at bond holdings, we can also choose treasury bond index funds for investment.

The Treasury Bond Index Fund tracks the index, and the index constituents are all Treasury bonds. There are no credit bonds, so the probability of such a fund falling into the trap is not high.