Investment methods of bond funds:

1. Make sure there are correct reasons for investment;

The purpose of buying a bond fund is to increase the stability of the portfolio, or to obtain higher returns than cash. This strategy is feasible. If you think that buying a bond fund will not lose money, you need to think again. Bond funds also have risks, especially in the environment of raising interest rates. When the interest rate goes up, the price of bonds will fall, so bond funds may have negative returns. Especially in China, most bond funds hold a lot of convertible bonds, and some also invest a small amount of stocks. The fluctuation of stock prices, especially convertible bonds, will increase the uncertainty of fund returns.

2. Know what your bond fund holds;

in order to avoid investment mistakes, it is necessary to know what bond funds hold before buying.

for ordinary bonds, the two basic elements are interest rate sensitivity and credit quality. The rise and fall of bond prices is inversely related to the rise and fall of interest rates. When interest rates rise, bond prices fall. The sensitivity of bond price changes and thus the net asset value of bond funds to interest rate changes can be measured by duration. The longer the duration, the more sensitive the net asset value of bond funds is to the change of interest.

3. Understand the credit of bond funds;

the credit of a bond fund depends on the credit rating of the bonds it invests in. Investors can learn about the restrictions on the credit rating of the bonds they invest in through the fund prospectus; Understand the credit rating of the bonds held through the fund portfolio report.

For domestic portfolio bond funds, investors also need to know the proportion of convertible bonds and stocks they invest in. The fund holds more convertible bonds, which can improve the profitability, but also amplify the risk. Because the price of convertible bonds is affected by the linkage of positive stocks, the fluctuation is greater than that of ordinary bonds. In particular, the return rate of funds holding a large number of convertible bonds may be far greater than that of bond markets.

4. Hedge tools in a volatile city;

when investors choose stock funds, they will bear greater risk of fluctuation. In this market structure, bond funds with good liquidity, low risk and higher return rate than savings rate can reduce the risk of investors. At present, more than 8% of the assets of bond funds in the market are composed of government bonds, financial bonds and corporate bonds with high credit rating, and there is basically no credit risk. After controlling the interest rate risk, the risk of bond fund net value falling is very small and the income is very stable. It is a better alternative to bank deposits, which caters to the steady income and low risk demand of Chinese residents' financial management.