A bond fund or debt fund is a fund that invests in bondsor other debt securities. Bond funds typically pay periodic dividends that include interest payments on the fund's underlying securities plus periodic realized capital appreciation. Bond funds typically pay higher dividends than CDs and money market accounts.

Most bond funds pay out dividends more frequently than individual bonds. Bond Funds can be classified by their primary underlying assets: Bond funds may also be classified by factors such as type of yield high income or term short, medium, long or some other specialty such as zero-coupon bondsinternational bonds, multisector bonds or convertible bonds. An important property of bond funds is the rating of the bonds they own.

Funds may be rated from high to low credit quality. The quality of a fund is the average of the bonds owned by the fund. Funds that pay higher yields typically own lower quality bonds. Like stocks, the price of high-yield bonds is subject to fashion. In fact, there were few bond defaults and the price recovered.

Due to the lower price, investors sold out of high-yield bond funds, having a desire for "safe" cash and bonds. Funds invest in different maturities of bonds. This may be described by terms like "short", "intermediate", and "long". This affects how the fund value changes with interest rates.

Funds invested in longer bonds will have more change. Bond funds usually have a target length, such as five ichimoku trading strategies setups ten years. Thus over time, they need to sell shorter bonds and buy longer bonds to stay in range. A bond fund with such a target length will never "mature" like a specific bond.

Some UITs own bonds with a specific maturity date and will terminate at that point. Price charts on bond funds typically do not reflect their performance due to the lack of yield consideration.

To accurately evaluate a bond fund's performance, both the callable bond vs convertible bond price and yield must be considered. The combination of these two indicators is known as the Total Return.

Difference Between Callable and Convertible Bonds | Callable vs Convertible Bonds

From Wikipedia, the free encyclopedia. Bond Debenture Fixed income. Agency bond Corporate bond Senior debt Subordinated debt Distressed debt Emerging market debt Government bond Municipal bond. Accrual bond Auction rate security Callable bond Commercial how much does a biologist make Contingent convertible exchange rate usd to cad rbc Convertible bond Exchangeable bond Extendible bond Fixed rate bond Floating rate note High-yield debt Inflation-indexed bond Inverse floating rate note Perpetual gamma of a stock option Puttable bond Reverse convertible securities Zero-coupon bond.

Clean price Convexity Coupon Credit spread Current callable bond vs convertible bond Dirty price Duration I-spread Mortgage yield Nominal yield Option-adjusted spread Risk-free bond Weighted-average life Yield curve Yield spread Yield to maturity Z-spread.

Surety Bond Vs. Cash Bond | Finance - Zacks

Asset-backed security Collateralized debt obligation Collateralized mortgage obligation Commercial mortgage-backed security Mortgage-backed security. Callable bond Convertible bond Embedded option Exchangeable bond Extendible bond Puttable bond.

Commercial Mortgage Securities Association CMSA International Capital Market Association ICMA Securities Industry and Financial Markets Association SIFMA. Retrieved from " https: Bonds finance Funds Financial markets. Webarchive template wayback links Articles with limited geographic scope from September Navigation menu Personal tools Not logged in Talk Contributions Create account Log in.

Views Read Edit View history. Navigation Main page Contents Featured content Current events Random article Donate to Wikipedia Wikipedia store. Interaction Help About Wikipedia Community portal Recent changes Contact page. Tools What links here Related changes Upload file Special pages Permanent link Page information Wikidata item Cite this page. This page was last edited on 6 Juneat Text is available under the Creative Commons Attribution-ShareAlike License ; additional terms may apply.

By using this site, you agree to the Terms of Use and Privacy Policy. Privacy policy About Wikipedia Disclaimers Contact Wikipedia Developers Cookie statement Mobile view. The examples and perspective in this article may not represent a worldwide view of the subject. You may improve this articlediscuss the issue on the talk pageor create a new articleas appropriate. September Learn how and when to remove this template message.