Bonds are creditor's rights and debt certificates issued to investors when the government, financial institutions, industrial and commercial enterprises and other institutions directly borrow money from the society to raise funds, and promise to pay interest at a certain interest rate and repay the principal according to the agreed conditions.
According to the classification standard of China Securities Regulatory Commission, bond funds refer to funds with more than 80% of fund assets invested in bonds. Bond funds can also put a small amount of money into the stock market. In addition, investing in convertible bonds and issuing new shares are also important channels for bond funds to obtain income.
In China, bond funds mainly invest in government bonds, financial bonds and corporate bonds. Usually, bonds provide investors with a fixed return and repay the principal at maturity, and the risk is lower than that of stocks. Therefore, compared with stock funds, bond funds have the characteristics of stable income and low risk.