Bond funds

Bond funds are investment funds that pool money from many investors to buy a diversified portfolio of bonds, which are debt instruments issued by governments, corporations, or other entities to raise capital. When you invest in a bond fund, you're essentially lending money to these issuers in exchange for regular interest payments and the return of your principal at maturity. Bond funds offer diversification, professional management, and liquidity, making them suitable for investors seeking income and relatively lower risk compared to stocks. The fund's value fluctuates with interest rates and the credit quality of its holdings.