intermediate term bond funds

Guest

Interested to know about intermediate bond funds. any suggestions from anyone here?

Caron

Hi Blifil,

Intermediate term bond mutual funds have average maturities of 3 to 10 years. An intermediate term bond fund never matures like individual bonds in the portfolio. These funds hold a large number of bonds that mature at different times as they are bought at different times.

Intermediate bonds are renewed or redeemed by the fund as they mature, but the new ones are added continuously. In this way, the fund is able to maintain a diversified portfolio.

The risk and return related to intermediate bond funds are less compared to long-term bond funds and higher than short-term bond funds. For example, an intermediate bond carrying junk bonds will have greater risk and the potential for a higher return than a bond having high grade bonds in large numbers.

Thanks,

Caron.

jerry · Posted: Tue Jun 13, 2006 3:58 am Post subject: RE:

Hi,

Intermediate bonds are suitable for investors who require a steady source of supplementary income. These bonds are not a good match for investors who seek higher returns from their bond investments. It is not suitable for bond investors who are averse to high risk.

Thanks,
jerry.

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