The difference between bonds and bond funds
1, the expected annualized expected return of bond funds is not as fixed as the interest of bonds.
The income from bond investment is basically certain. When each bond is issued, the interest rate, interest-bearing method and term have been marked. Generally, you only need to hold the due principal and income. As a combination of different bonds, the expected annualized expected return of bond funds is more difficult to predict than the expected annualized expected return of a single bond bought and held at maturity.
2. Bond funds have no definite maturity date.
Bond funds, especially open-end bond funds, have no fixed maturity date, so as long as the funds are not dissolved, they can continue to invest. General bonds have a clear maturity date, and the investment ends after the bond repays the principal and interest.
3. Different investment risks
Generally speaking, the investment risk of bond funds is higher than that of bonds. As the maturity of bonds approaches, it is expected that the annualized interest rate risk will decrease. Bond funds have no fixed maturity date, and the expected annualized interest rate risk they bear will depend on the average maturity date of the bonds they hold. The average term of bond funds is relatively constant, and the expected annualized interest rate risk assumed by bond funds usually remains at a certain level.