Bond funds

What is a bond fund?

A bond fund is a fixed-income funds that buys fixed-income securities with terms of over one year. Bond funds are suitable when you want to save for a few years for larger purchases such as a car, a wedding, a boat or a holiday cabin.

Saving in a bond fund is also a good solution for people who want to combine this with investing in equity funds so you can adjust the risk in your overall savings portfolio

Bond funds are suitable for people who are willing to accept slight fluctuations in their savings, in exchange for slightly higher expected returns than saving in a bank account.

When should I choose a bond fund?

If you want to invest money in the medium term, bond funds are a good alternative to saving in an account. If you would like the possibility of a better return that what you get in liquidity funds , a bond fund may be better suited for you, as the return is normally higher over time.

If you are looking for a very high return on your money, liquidity funds are not for you. In that case you are better off looking at savings with a higher level of risk which are more suited to long-term savings such as equity funds or individual shares.

Historical returns are no guarantee of future returns. Future returns will depend, among other things, on market developments, the skill of the Portfolio Manager, the mutual fund’s risk, and the management costs. Returns may be negative as a result of mark-to-market losses.

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