Benefits of bond funds
Get higher income potential
Bond mutual funds and bond ETFs give your portfolio the opportunity to earn income, unlike money market funds (which focus on maintaining the value of your cash) and stock funds (which aim for long-term growth).
Add stability to your portfolio
When included in a well-balanced portfolio, bond funds can help balance the risks associated with stock funds. Inflation-protected bond funds can also help you keep pace with inflation. These funds invest in government bonds and are routinely adjusted for inflation.
Help reduce your investment risk
Fixed income mutual funds and ETFs can contain hundreds—sometimes thousands—of bonds in a single fund. You get more diversification than owning just a handful of individual bonds.