Categories > Bond Funds
What is a Bond Fund?
A bond fund is a fund invested primarily in bonds and other debt instruments. The exact type of debt the fund invests in will depend on its focus, but investments may include government, corporate, municipal and convertible bonds, along with other debt securities like mortgage-backed securities.
In general, many bond and bond funds are considered to be lower risk because, for the most part, a bond holder will receive the principal on the bond as long as the bond is held to maturity
However, there is the risk of default, which can lead to a partial or total loss of principal that can make some bond funds risky. It is important to determine the risks involved in any investments including bond funds as the risk characteristics vary