How to choose a bond fund? Can I buy a bond fund?

Jul 24 - 2021

How to choose a bond fund? Can I buy a bond fund?

Bond funds are a relatively robust class of funds among all types of funds in the public fund market. There are a variety of bond funds, including pure bond funds, primary bond funds, secondary bond funds, etc. And in our fund portfolio, bond funds mostly appear in the role of balancing portfolio risk, and it is not recommended to layout too many bond funds if the main purpose is to earn income.


At present, although several bond funds with relatively high cumulative net worth have also achieved annualized yields of 10% to 15% over the past 20 years, the yield of bond funds predictably declines year by year as the new regulations on capital management break the rigid exchange rate and the general background of the decline in China's overall interest rates, and the bond funds with relatively high net worth currently do not have low equity positions, and a lot of the contribution ratio of earnings is due to stocks.


Of course it is not to say that bond funds are not suitable for investment, it has its own asset characteristics and advantages, such as volatility is much lower than stocks, positions are easier to adhere to, etc.

However, bond investment is subject to greater credit risk and is very much a test of the fund company's research strength, information insight, and even social influence. Therefore, choosing a good bond fund is more difficult than choosing a good stock fund. Moreover, even if you choose a good one, you can't avoid the risk of bond mines, which requires you to take another position in the bond fund, further increasing the difficulty of investment. Therefore, it is more recommended to use FOF funds for portfolio investment in the general investment direction of bond funds, so that the professional investment team can manage the portfolio position