Generally speaking, investing in bond funds is aimed at achieving stable returns. Although the fluctuations cannot compare with the heart-pounding movements of stocks, the situation over the past month or so has been quite "volatile."

So, what should one do? Can bond funds still be a choice for stable investment in the future?

Firstly, we need to distinguish between two concepts: pure bond funds and bond funds. Not all milk is called Telunsu, and not all bond funds are pure bond funds; only the most "pure" ones qualify.

The rest, such as primary bond funds, secondary bond funds, convertible bonds, and so on, are not strictly fixed-income products. They all have some element of the stock market involved, hence their returns cannot be considered particularly stable.

That is to say, if you are looking for stable investment, you should focus on pure bond funds.

Secondly, there are also skills in choosing pure bond funds.

Not all pure bond funds are immune to significant losses. Over the past three years, products with larger loss margins can also easily exceed 20%.

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Pure bond funds have the potential for losses, and their returns mainly come from two parts: one is bond interest, and the other is bond price fluctuations. As long as the bonds do not default, the interest can be collected as scheduled, but bond price fluctuations may lead to short-term losses.When market interest rates rise, bond prices tend to fall across the board, leading to a corresponding decline in the net asset value of bond funds. The specific reasons are quite complex, but it can be simply understood that market interest rates represent the return on cash deposits. When they rise, people are more inclined to hold cash rather than bonds, hence the drop in bond prices.

Therefore, when purchasing pure bond funds, it is important to pay attention to one metric—the maximum drawdown rate. Historically, funds with smaller drawdown rates will experience smaller declines when everyone else is falling, and they are less likely to see significant drops.

All assets share a common characteristic: it is easy to fall but slow to recover. For products like pure bond funds that rise at a "turtle's pace," this issue is undoubtedly more concerning.

Good products, in the long term, such as over half a year or more than a year, are almost unlikely to be in continuous loss. If you hold for 2-3 years, it is even less likely to incur a loss. Therefore, if you have just bought and it has fallen, there is no need to rush to sell unless there are better investment options available.

Lastly, as mentioned earlier regarding long-term pure bond funds, categories such as primary bond funds, secondary bond funds, and convertible bond funds were discussed, but short-term pure bond funds were not mentioned. What are these?

In pure bond funds, the term "long-term" or "short-term" refers to the duration of the bonds held by the fund. Those with longer durations are more sensitive to changes in market interest rates, while those with shorter durations are less sensitive.

Therefore, when market interest rates are adjusted upward, short-term pure bond funds may not necessarily incur losses, or the extent of the losses may be smaller compared to long-term funds. Correspondingly, when it comes to making profits, the degree will also be smaller.

Currently, some institutions in the market believe that with the improvement of the domestic epidemic situation, policies will not continue to be loose, and thus the bond bull market that has been ongoing for the past two years has come to an end. Consequently, the performance of long-term pure bond funds will not be very good moving forward. If you believe in this judgment and cannot find particularly good conservative investment methods, you might consider short-term pure bond funds, which can mostly outperform Yu'e Bao.

Of course, there are also different opinions, such as those who believe that the recent downturn in the bond market is just a short-term fluctuation, and those factors will not end the bond bull market. Moreover, the CPI data in April has improved, which has provided some room for monetary policy, so it is also possible that market interest rates may continue to decrease, and the bond bull market has not yet ended.

In summary, it is not very difficult to avoid losses when investing in bond funds. By choosing the right category, the right product, and persisting in holding, the probability of incurring losses will be very small.