Bond Mutual Funds Guide Intro

by Mutual Funds Philippines

If you are in to investing you’ve probably encountered and heard this term a lot. Well if you’re not, then your luck has brought you here for you to read this article. The word bond means a debt security issued by a company, municipality, or government agency. The term bond mutual fund is an investment company created exclusively to manage a pool (the fundamental concept behind mutual funds in which a fund aggregates the assets of investors who share common financial goals.) of portfolios (investments) consisting for the majority part of individual bonds. To a restricted level, bond mutual funds may also spend in other types of securities. Investors acquire shares in the fund. Each share represents a relative ownership interest in the pool of bonds comprising the fund's portfolio. Professional money managers use the money invested by shareholders to buy and sell bonds for the portfolio in harmony with the fund's investment intention. Bond mutual funds have several important advantages that differentiate them from individual bonds. On top, many bonds make permanent interest payments. On the other hand, a bond mutual fund, which is a dynamically managed portfolio of different bonds, does not have a maturity date, nor are its dividend payments fixed. A bond mutual fund's diversification (spreading your investments across different asset classes or different types of investments within an asset class) decreases exposure to risk. There are no guarantees when investing in a bond mutual fund. Even if the individual bonds in the fund are guaranteed by the government or insured through a private insurer, the value of a bond mutual fund investment can still rise or fall.

A Guide In Mutual Funds

Mutual fund investment is probably the easiest type of investment vehicle for anyone who wants to earn residual income and compound interest overtime.

What mutual funds do is to keep the income of the investor mainly because its interest. The compound interest from adding investment into the funds will compound and will earn money till retirement.

To know how to invest in mutual funds. There is a mutual fund guide written on the link provided.