Corporate bond fund
A corporate bond fund is a mutual fund that invests in corporate bonds. If a bond fund is not otherwise designated, it is presumed to be a corporate bond fund.
Contents |
Expanded Definition
Bond rating and maturity are key factors in types of bond funds. Corporate bond funds are usually assumed to invest in investment-grade bonds unless they are labeled as a high-yield bond fund or a junk bond fund. Investment-grade bonds are rated "AAA" to "BBB-" among credit-rating agencies. Junk bonds are rated "BB+" or lower.
The average maturity of a bond fund may be long or short. Short bond funds pay a lower yield and are less volatile. The market value of long bond funds will vary more with changes in interest rates and related news.
RSS Headlines
Fool UK