Today, when the concept of financial management is deeply rooted in people's hearts, more and more friends start to buy funds, financial products or stocks. Some friends found that there are two kinds of bond-related funds when choosing funds, one is convertible bond fund and the other is bond fund, which look very similar. Because there are still many friends who have not figured out the difference between convertible bonds and bond funds, here is a brief introduction to the difference between them.

Simply put, the difference between convertible bond funds and bond funds is mainly concentrated in two aspects, one is the difference of investment objects, and the other is the difference of stability.

Different investment objects

The main investment objects of convertible bonds fund are convertible bonds, while the main investment objects of bond funds are government bonds, financial bonds and corporate bonds. Here, I would like to introduce you to what convertible bonds are.

Convertible bonds are bonds that bondholders can convert into common shares of the company at an agreed price at the time of issuance. If the holder fails to exchange shares within the prescribed time limit, he can collect the principal and interest at maturity or sell them in the secondary market for realization.

Different stability

Because the convertible bonds held by the convertible bond fund have the right to be converted into stocks, the convertible bond fund can get a higher return on investment when there is a big bull market in stocks. Compared with convertible bond funds, the expected return of bond funds is relatively stable.