Each fund has its own advantages and disadvantages. In the process of financial management, investors need to fully manage their finances and choose corresponding funds in different market environments. What are the advantages and disadvantages of that level of bond fund?

Advantages of bond funds:

1. Ordinary investors can easily participate in investment in products such as inter-bank bonds, corporate bonds and convertible bonds. These products have various inconvenient restrictions on small funds, and buying bond funds can break through this restriction.

2. When the stock market is depressed, the expected annualized expected return of bond funds is still very stable and is not affected by market fluctuations. Because the expected annualized expected return of products invested by bond funds is very stable, the expected annualized expected return of corresponding funds is also very stable. Of course, this also determines that their expected annualized expected return is subject to the expected annualized interest rate of bonds and will not be too high. The expected annualized interest rate of corporate bonds is about 4.5%, and the expected annualized rate of return after deducting the operating expenses of the fund is between 3.3% and 3.5%.

Disadvantages of bond funds:

1. Only if you hold it for a long time can you get a relatively satisfactory expected annualized expected return.

2. When the stock market skyrocketed, the expected annualized expected return remained stable at the average level. Compared with equity funds, the expected annualized expected return is lower, and there is even the risk of loss when the bond market fluctuates.

Investment risks of bond funds:

Any investment product will have risks, but the risks are different. Bond fund is a relatively low-risk financial product, and the investment target is bonds, so as long as bonds have risk attributes, bond funds will have them.

For bonds, the main risks come from two aspects: one is the expected annualized interest rate risk, and the other is the credit risk. The expected annualized interest rate risk is reflected in the fact that the bond price is highly correlated with the expected annualized interest rate in the market and changes in the opposite direction, so when the market expects the annualized interest rate to rise, the bond price will fall; Credit risk is reflected in the fact that the debtor of the bond can't fulfill the obligation of repayment as agreed, which makes the bond price fall and the bondholders suffer losses.

Therefore, these risk characteristics of bonds will also be reflected in bond funds.