The key difference between bond funds and bond ladder is that with individual bonds, you have total control of the durations of the bonds you are investing, and that you receive a guaranteed return if you hold the individual bonds to maturity.
Regardless of what happens to the interest rate, your individual bonds will not lose value if you hold them to maturity.
In other words, zero volatility and guaranteed return if you hold them to maturity.
With bond funds, you will be subject to volatility of bond fund price and you could lose capital if you need to sell when the bond fund price is down.
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Regardless of what happens to the interest rate, your individual bonds will not lose value if you hold them to maturity.
In other words, zero volatility and guaranteed return if you hold them to maturity.
With bond funds, you will be subject to volatility of bond fund price and you could lose capital if you need to sell when the bond fund price is down.
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Statistics: Posted by LeslieSmiley — Fri Feb 09, 2024 12:35 pm — Replies 15 — Views 1595