I have read a lot about the problems of bond funds in a rising interest rate environment since they never actually mature.If you are worried about the 'never mature' part, you might want to look into target date bond funds/ETFs. They are designed to buy bonds that are due in a specific time frame and hold them to maturity, then pay out the proceeds. Here's a link to an article that explains these funds, and some of their pitfalls - the author seems to think that there are more pitfalls than benefits, but he does concede that there might be benefits for some people.They are relatively new, so there isn't a lot of history to see how they will perform.But if you don't use bond funds for the fixed income portion of a portfolio, what do you do?You might also want to look into funds/ETFs that hold preferred stocks. Although not completely 'fixed income', preferreds do provide a known dividend, like a bond does. AJ
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