Fund is a popular financial management method at present, and more and more people begin to buy funds for financial management. There are many kinds of funds. According to the classification standard of China Securities Regulatory Commission on fund categories, the bond funds we usually refer to refer to are funds that invest in bonds, especially those that invest more than 80% of the fund assets in bonds. In contrast, a pure debt fund refers to a fund that 100% invests in bonds. This article will give you a brief understanding of the risk level of pure debt funds.

The investment risk of pure debt funds is relatively low, which is suitable for buyers who like steady investment. Because pure debt funds mainly invest in fixed-income bonds such as treasury bonds, financial bonds and short-term financing bills, the bond investment ratio is 100%, so the expected returns and risks of pure debt funds are relatively stable.

The reasons for the relatively small investment risk of pure debt funds are as follows:

The first is that the bond default probability of pure funds is small. After purchasing bonds, buyers may encounter the situation that the bond issuer fails to pay the principal and interest in time after the bond expires. In this case, the corresponding funds will inevitably lose money. The advantage of pure debt funds is that pure debt funds usually buy senior bonds such as treasury bonds and financial bonds, with high credit rating and low probability of bond default. For property buyers, the risk will also be greatly reduced.

Secondly, pure debt funds do not buy stocks from the secondary market, so the loss range is limited. For most bond investments, there are two main sources of income: obtaining expected income through interest, and earning the difference through buying low and selling high in the secondary market. Bond prices are negatively affected by market interest rates. When the bond market interest rate rises, the bond price will fall or rise. This fluctuation is obvious. Pure debt funds do not subscribe for new shares or buy stocks from the secondary market. Even if the pure debt fund loses money, it is limited and will not lose a lot.

Based on the above two points, pure debt fund is a fund product with small fluctuation, high certainty and relatively small risk. Therefore, it is more popular in the market.

However, small risk does not mean no risk. Even a pure debt fund is still an investment credit bond. Buyers should also consider various factors such as the entry point of buying bonds when choosing funds, and buy funds under the condition of adequate analysis and preparation.