Once you've decided to diversify your portfolio with a fixed income investment, you'll need to decide whether bond funds or individual bonds may better suit your risk tolerance, goals, income needs, and desire for liquidity. In many cases, a bond fund may be more appropriate as it offers a convenient, liquid, and cost-effective way to invest in the fixed income asset class.
Bond Funds invest in many securities with different coupon payments. The income received from the underlying investments is distributed monthly to shareholders. The distribution may vary from month to month.
*When you sell shares in a fund, you receive the current net asset value (NAV), less any redemption fee, if applicable.Individual Bonds pay a fixed stream of income, generally semi-annually, and they return your principal on a specific date if held to maturity.*
*Any fixed income security sold prior to maturity may be subject to a substantial gain or loss.
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