Definition of Bond Funds



A bond fund is a kind of mutual funds in which investors want to pool their money into a fund that only invests only in bond securities. Since the funds accumulated in a bonds fund are aggregated on irregular intervals the fund might have different values of bonds. There is also no maturity date for bond funds for repayment of principal and this is why the bonds fund can have different principal amounts at different times.

 


The interest payments received by bond funds are distributed among investors will be varying as the principal value of the bond fund fluctuates. The bond funds normally specialize in certain types of bonds. It can be government bonds, corporate bonds, convertible bonds, etc.

 

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