Bond Sector Diversified

Bond sector diversified mutual funds and ETFs invest their assets across a... Bond sector diversified mutual funds and ETFs invest their assets across a number of fixed-income sectors in search of yield and capital appreciation. These funds may own U.S. government bonds, U.S. corporate bonds, as well as foreign bonds of varying degree of credit quality, yield and duration. Usually these securities have the benefit of flexibility, because the portfolio manager has a larger pool of securities to choose from and he or she can use discretion to decide which specific set of bonds can offer the highest risk-adjusted return potential. As with other bond funds, mutual funds and ETFs in this category will be affected by changes in interest rates and default rates. Falling interest rates are beneficial for bond prices, and low default rates (aka higher credit quality) can also act as a tailwind for these securities. Conservative investors looking to build or boost their fixed income portfolio can focus on diversified bond mutual funds and ETFs that may tilt more towards government bonds or investment grade corporate bonds while those seeking higher income can target diversified bond mutual funds and ETFs that look at a diversified pool of high-yield securities. Last Updated: 12/08/2023 View more View less

Bond sector diversified mutual funds and ETFs invest their assets across a number of fixed-income sectors in search of yield and capital appreciation. These funds may own U.S. government bonds, U.S. corporate bonds,... Bond sector diversified mutual funds and ETFs invest their assets across a number of fixed-income sectors in search of yield and capital appreciation. These funds may own U.S. government bonds, U.S. corporate bonds, as well as foreign bonds of varying degree of credit quality, yield and duration. Usually these securities have the benefit of flexibility, because the portfolio manager has a larger pool of securities to choose from and he or she can use discretion to decide which specific set of bonds can offer the highest risk-adjusted return potential. As with other bond funds, mutual funds and ETFs in this category will be affected by changes in interest rates and default rates. Falling interest rates are beneficial for bond prices, and low default rates (aka higher credit quality) can also act as a tailwind for these securities. Conservative investors looking to build or boost their fixed income portfolio can focus on diversified bond mutual funds and ETFs that may tilt more towards government bonds or investment grade corporate bonds while those seeking higher income can target diversified bond mutual funds and ETFs that look at a diversified pool of high-yield securities. Last Updated: 12/08/2023 View more View less