Thursday, December 23, 2010

Bond Fund

A bond fund invests primarily in bonds and other debt securities and instruments. Within bond funds there is a wide variety of specialties. For example there are global bond funds which invest in bonds throughout the world, and may use a variety of strategies to try and add value to returns. Other focuses and security types bond funds may invest or specialize in include: government bonds (or sovereigns), corporate bonds (credit), mortgage backed securities, convertible bonds, municipal bonds, and others. Some may even specialize in junk bonds or high yield securities that have a lower credit rating. Many bond funds will have a minimum credit rating within which they can invest, for example A- and above, or investment grade (BBB and above) or better. The largest bond fund managers at present are Blackrock and PIMCO.

Synonyms:  Bond portfolio, Bond manager, Debt fund, Sovereign fund, Credit fund, Fixed income fund, Fixed income portfolio

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