Know your debt funds: What is corporate bond fund?Kayezad E. Adajania
A bond fund is a mutual fund or an exchange-traded fund (ETF) that buys and sells debt instruments like government and corporate bonds. The primary goal of a bond fund is to generate monthly income for investors. For an investor, a bond fund is an alternative to buying individual bonds. ...
Not all income from municipal bond funds is tax-free, though. Some interest income may be subject to the Alternative Minimum Tax. Plus, when a fund sells some of its underlying bonds, it can generate a distribution that fund shareholders could owe tax on. When you sell or exchange shares ...
A government bond is a debt security issued by a government to support spending and obligations. Government bonds pay bondholders periodic interest payments calledcoupon payments.Government bondsissued and backed by national governments are often considered low-risk investments. Government bonds issued by ...
Other bond funds focus on a narrower slice of the bond market, such as a short-term Treasury fund or a corporate high-yield fund. Whether the fund’s mandate is broad or narrow, bond funds invest in many different securities—often buying and selling according to market conditions and ...
A baby bond is a fixed income security that is issued in small-dollar denominations, with a par value of less than $1,000. The small denominations enhance the attraction of baby bonds to average retail investors.小额债券是一种以小面值发行的固定收入证券，票面价值低于1000美元。小面额债券增强了...
An exchange-traded fund (ETF) tracks multiple stocks or other securities to let you invest in a sector, industry, or even region—Through an ETF, you could also track an index, so you don’t have to pick individual stocks.🤔 Understanding an ETF Some people want to select and invest ...
(a) What is a money market mutual fund? (b) Briefly describe the role of money market mutual funds in the commercial paper market. Money Market Money market means the market where money and highly marketable securities are bought and ...
Open-ended funds do not trade at a premium or a discount, making it easy and predictable to determine precisely how much a fund’s shares will generate if sold. A bond sold at a premium has a higher market price than its original face value amount while a discount is when a bond is ...
in interest rates. According to Morningstar, the average intermediate bond fund has a gross expense ratio of 1.07%. Fees are a very important factor for anyone deciding whether to purchase a particular fixed-income fund as there is ahigh correlationbetween expenses and fixed-income fund ...