Whether there is a loss depends on the situation. It must be noted that breach of contract does not mean that repayment and interest are not paid at all, but that the relevant principal and interest are not guaranteed.

For ordinary bond investment funds, when a bond defaults, the so-called long debt becomes short debt. Let's give a simple example. For example, if a bond is about to expire after 10 years, the relevant debt will be determined at a specific time according to legal procedures due to the default event, which means that the debt amount of this bond will also be characterized at that time because of this situation, and of course, the unpaid interest of its bond will not be calculated again until it is counted. When someone rescues the issuer of this bond in a short time, there is a great chance that the bond will be paid in full. Due to the default of bonds, the original long-term debt has become short-term debt, and in fact, excess returns can be obtained. The main reason is that yield to maturity with long-term debt is generally higher than yield to maturity with short-term debt. If a long-term debt yield to maturity is converted into a short-term debt yield to maturity, a spread will be formed. If this happens, the fund will not necessarily lose money. However, when the fund is not fully repaid, how much the fund loses depends on how much the fund invests in the defaulted bonds and the repayment rate after default.

Of course, there is also a kind of fund, commonly known as vulture fund (see Baidu encyclopedia entry "vulture fund" for details). Simply put, it is a fund that seeks high profits through the acquisition of default bonds and malicious lawsuits. Vulture funds usually like to buy corporate bonds that are in trouble. When companies can't repay them, they start to sue and demand huge compensation. For example, Argentina went bankrupt at the end of 200 1, that is, the relevant vulture fund dragged on the lawsuit of 10 for many years in a similar way, and this fund never compromised.