Bond Funds

Bond funds are professionally managed portfolios that invest in individual fixed income securities.

Reasons to consider bond funds

  • Potential for capital preservation, depending on the fund
  • Income generation
  • Diversification for a potential hedge against stock market volatility
  • Liquidity

Funds are guided by a stated objective, generally focusing on a particular sector, such as corporate or Treasury bonds; a broad category, such as investment grade or high yield securities; or a specific time horizon, such as short-, intermediate-, or long-term bonds.

How Fidelity manages bond funds

Types of bond funds

Investment grade

Invest in high credit quality securities issued by the U.S. Treasury, U.S. government agencies, and U.S. corporations, as well as bonds backed by mortgages or other assets. Learn more about types of investment grade bond funds.

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Invest in bonds issued by state governments and municipalities. While they tend to offer lower yields, the income they generate is generally free from federal income taxes.* Learn more about types of municipal bond funds.

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High yield

Invest primarily in lower credit quality securities, including convertible securities. While these can potentially provide income and total returns higher than those offered by investment grade bond funds, they do have the potential for greater volatility and risk. Learn more about types of high yield bond funds.

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Invest in a mix of taxable bonds, including both high yield and investment grade securities issued by the U.S. and by foreign governments, as well as domestic and foreign corporations, giving investors the ability to create a diversified fixed income portfolio through a single fund. Learn more about multisector bond funds.

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International & global

International bond funds invest in a range of taxable bonds issued by foreign governments and corporations. Global bond funds invest in bonds from around the world, including bonds issued by U.S. government agencies and corporations. Learn more about types of international and global bond funds.

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