Bond mutual funds are carried out through the collection and management of public investment funds by investment managers, the majority of whose funds are allocated to bonds, whether government bonds or corporate bonds. The maturity period for these mutual fund bonds is generally 1 year to 3 years. Investors will receive coupons or interest periodically.
Bond Mutual Fund Investment Pros
There are several pros or advantages of bond mutual funds that you can take into consideration before investing:
1. Tax on interest income
The interest/coupon tax from bond mutual funds is smaller (10%) compared to bonds purchased directly on the secondary market (15%).
2. Disbursement at any time
Bond mutual funds do not have a maturity date so we can withdraw them whenever we need money.
3. Minimum capital
The capital required to participate in bond mutual funds is very small, only $1,
Cons of Bond Mutual Fund Investment
Apart from that, we also have to consider the cons or disadvantages of bond mutual funds, including:
1. Investment instruments are held by an investment manager, which is different from when you buy bonds directly on the stock exchange.
2. Profit will depend greatly on the influence of inflation and interest rates. If interest rates are high, the performance of mutual funds will weaken, whereas if inflation and interest rates decrease, the performance of bond mutual funds will be better.
Bond Mutual Fund Investment Pros
There are several pros or advantages of bond mutual funds that you can take into consideration before investing:
1. Tax on interest income
The interest/coupon tax from bond mutual funds is smaller (10%) compared to bonds purchased directly on the secondary market (15%).
2. Disbursement at any time
Bond mutual funds do not have a maturity date so we can withdraw them whenever we need money.
3. Minimum capital
The capital required to participate in bond mutual funds is very small, only $1,
Cons of Bond Mutual Fund Investment
Apart from that, we also have to consider the cons or disadvantages of bond mutual funds, including:
1. Investment instruments are held by an investment manager, which is different from when you buy bonds directly on the stock exchange.
2. Profit will depend greatly on the influence of inflation and interest rates. If interest rates are high, the performance of mutual funds will weaken, whereas if inflation and interest rates decrease, the performance of bond mutual funds will be better.
