No. of Recommendations: 4
But buying a bond fund is NOT an easy way to buy bonds. It is merely an easy way to buy shares of an investment company that invests in bonds.

Here is my understanding: if I buy a bond fund, the company will pass on most of its income from its bond holdings onto me (minus management expenses), since I am the shareholder (in the bond mutual fund or bond ETF). The NAV of the fund will depend on the current market price of the bonds it holds. Buying a broad ETF such as BND instead of a single bond, I could spread my risk (may not minimize/maximize it, just spread it).
Do you find any of these statements untrue?
Bond funds may not be ducks but for a defensive investor (amateur, with minimal time for research) such as me, they quack and walk sufficiently like bonds.
Print the post  


What was Your Dumbest Investment?
Share it with us -- and learn from others' stories of flubs.
When Life Gives You Lemons
We all have had hardships and made poor decisions. The important thing is how we respond and grow. Read the story of a Fool who started from nothing, and looks to gain everything.
Community Home
Speak Your Mind, Start Your Blog, Rate Your Stocks

Community Team Fools - who are those TMF's?
Contact Us
Contact Customer Service and other Fool departments here.
Work for Fools?
Winner of the Washingtonian great places to work, and Glassdoor #1 Company to Work For 2015! Have access to all of TMF's online and email products for FREE, and be paid for your contributions to TMF! Click the link and start your Fool career.