• International Monetary Fund predicts the U.S. economy is slow.

• The prospects for Western Europe and Japan are also not significant.

• the overall inflation rate increased in both developed and emerging economies.

* Oil prices doubled in the past 6 months.

• There is a possibility of a deeper recession.

• market value of the recent sharp decline in most countries.

The prayer is nothing but an ordinary reader of newspapers, especially the financial newspapers. Everyone will be affected, as the consequences of those statements. In such difficult times, if you put your money? The stock market – which is tantamount to suicide! Bank – the rate of return would be very low. Therefore, where?

One possible place is mutual funds. More secure than the stock mutual funds and get better returns than banks. But be cautious in selecting the economic recession of the investment funds. This is always a better choice of bond investments in the economic recession. It ensures that the regular payment of interest and capital appreciation potential, the bond prices to rise. Bond Fund allows you to do this.

As its name implies, these funds invest in bonds and debt instruments. The purpose of these funds is to protect the investment, while ensuring that the regular income from interest payments. Like any other investment funds, these funds have a net asset value (NAV), which is the value of each share of investment funds. Must not only pay when you sell fund shares or your part of the funds received.

Top 5 reasons why to invest in bond funds:

1. They are more than the equity risk

2. To provide a stable

3. Diversification – portfolio through a number of different bonds, thereby reducing the risk of default and to ensure regular payments.

4. For certain types of bond funds exempt from federal or state tax

5. They are more liquid than bonds.

In these advantages, the latter is the most important. It is precisely because you have to buy a bond fund rather than individual bonds. They can easily purchase and sale of smaller units. On the other hand, is not so easy to buy bonds and hold them. The liquidity of these bonds did not bond funds. Therefore, it is better to buy bond funds rather than bonds.

Types of bond funds

There are many different types of funds. The most important part of the government bond funds (or federal bond funds), municipal bond funds, corporate bonds, funds, etc.

The Government Bond Fund

These funds invest in the bonds, treasury bonds, treasury bonds, mortgage loans, debt securities issued by the Government-backed securities issued by government agencies, these funds and some other agencies have also exempted from the state and / or property taxes.

Municipal Bond Fund

These funds invest in public works issued by the State and / or local governments, such as building bridges securities, state-owned highways, school construction, laying, etc. It was also tax-free federal funds. Because they have the support of the federal government, is considered a very high evaluation.

Obligations to the Fund

These funds invest in corporate bonds. They do not have government support, so they are two types of funds than other risky. However, they pay the rent much higher than government funds.

In these funds have different bond funds, and many other types of zero-coupon funds – to invest in zero-coupon bonds, international funds – which invest only in the international bond funds, convertible securities – which invest in securities convertible bonds (bonds, may be converted into shares), etc.

These are some funds, investors can expect investment. However, there are more investment options. To learn more about access to mutual funds to invest in mutual fund investment, and get a concept of how mutual funds work visit Mutual Funds. Exchange Traded Funds will also visit the understanding of exchange-traded funds.

Tags: Bond, fund, Funds, Japan, Mutual, NAV, U.S., Western Europe