Bond Funds

A bond fund or debt fund is a fund that invests in bonds or other debt securities. They invest in fixed income securities e.g. government bonds, corporate debentures, convertible debentures, money market.

Investors seeking tax-free income go in for government bonds while those looking for safe, steady income buy government bonds or high-grade corporate bonds.

Though there have been historical exclusions, bond funds incline to be less volatile than stock funds and regularly produce regular income.

For these reasons, investors often use bond funds to diversity, deliver a stream of revenue, or invest for intermediate-term goals. Alike stock funds, bond funds have risks and can create or lose money.