What is a bond fund?

A bond fund is a type of mutual fund or exchangetraded fund (ETF) that invests in a diversified portfolio of bonds. Bond funds can invest in various types of bonds, including government, municipal, corporate, highyield, and international bonds. The goal of a bond fund is to generate income for investors through the interest payments on the underlying bonds held in the fund, as well as capital appreciation if the price of the bonds increases. Bond funds are a convenient way for investors to gain exposure to a diversified portfolio of bonds, without having to purchase individual bonds themselves. Bond funds can be actively managed or passively managed, and can have varying levels of risk and return, depending on the types of bonds held in the fund.