Fixed income fund, as its name implies, is a fund with relatively fixed income. At present, there are two kinds of fixed income funds, and there are differences between them. So what's the difference between these two types of fixed income funds? The following is an analysis of relevant contents brought by Bian Xiao, hoping to help everyone!

What's the difference between two fixed income funds?

The two kinds of fixed income funds in financial management are pure debt funds and short-term debt funds, which are quite different in investment characteristics and risk coverage. Relatively speaking, pure debt funds are more risky and have higher returns than debt funds, but they just need to bear more credit risks and interest rate risks.

1. Pure debt funds mainly invest in some excellent corporate bonds and other bonds in the market, and gradually determine the portfolio type according to the credit rating of bonds to ensure that bonds have very stable returns. Short-term bonds mainly invest in some low-risk fixed-income bonds, usually investing in some government bonds and local government bonds.

2. The main risks of pure debt funds are credit risk and interest rate risk. Usually, the issuer of bonds cannot repay the principal of bonds for some reason, which leads to the depreciation of funds, which is credit risk. Interest rate risk means that the change of interest rate affects the bond price and leads to the fluctuation of the fund's net asset value. For short-term debt funds, although deposit funds are more risky, they can get higher returns.

What is the difference between stock funds and fixed income funds?

The basic assets of 1 are different: the main basic assets of equity funds are equity assets such as stocks, while the basic assets of fixed-income funds are non-equity assets such as bonds and bills.

The relationship is different: investors indirectly hold shares of a listed company through equity funds and actually become shareholders; Fixed income funds reflect the relationship between creditors and debtors.

3 Different risks and returns: Equity funds have higher potential risks and returns, while fixed-income funds can provide investors with stable returns, and some funds also have the function of capital preservation.

So what are equity assets? Equity assets refer to common shares, preferred shares, depositary receipts, real estate trust certificates, etc. The characteristic of investing in such wealth management products is that you have the ownership of such products, but the income of such products cannot be guaranteed.

What is the difference between stock funds and fixed income funds?

The differences between stock funds and fixed income funds are as follows:

1, investment strategy

Stock funds usually adopt stock investment strategy, that is, to obtain capital profits by buying shares of listed companies in order to realize asset appreciation. The risks of these funds are relatively high, but the potential returns are also high.

Fixed-income funds adopt bond investment strategy, that is, they obtain fixed income by purchasing various bonds to ensure the safety of principal. These funds are usually low-risk, stable investment options with certain profitability and stability.

2. Risk

Equity funds may be affected by stock market fluctuations, and their value may be affected by market conditions, company performance and other factors. Therefore, equity funds are usually risky and suitable for long-term investors.

The risk of fixed income funds is low, because the principal and income of bonds are usually borne by the issuer. However, their returns are relatively low, and they are suitable for conservative investors or people who need short-term investment.

3. Income

Equity funds usually have higher potential returns, but they are also accompanied by greater risks. The returns of these funds are usually closely related to the performance of the stock market and the performance of the stocks held.

The income of fixed-income funds is usually deterministic, and the yield is determined by the interest rate of bonds, so the yield is relatively stable.

4. Investment cycle

Equity funds usually need a long investment cycle to get better returns. Therefore, equity funds are suitable for long-term investors.

Fixed-income funds usually have a short investment cycle and can obtain fixed income during the investment period. If investors prefer short-term investment or conservative investment, then fixed-income funds may be more suitable.

Which is better?

According to the above analysis of the differences between stock funds and fixed income funds, we can see that these two types of funds have their own advantages and disadvantages, so there is no better statement. For investors who are not sure what kind of fund to invest in, it is suggested to make a clear risk preference assessment and investment plan for themselves first, and then choose a fund type that is more suitable for them to invest. However, it is recommended that novices invest in fixed-income funds first, which is relatively less risky and can be used slowly.

What is the difference between stock funds and fixed income funds?

1 basic assets: stock funds correspond to fixed-income funds, and the basic assets of fixed-income funds are non-stock assets such as bonds and bills;

2 reflect the relationship: users actually become shareholders through equity funds, and the relationship reflected by fixed income funds is the relationship between creditors and debtors;

3 Risk-return: Equity funds have higher potential risks and returns, while fixed-income funds can provide users with stable returns.