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Bond funds invest primarily in bonds to provide
income with safety of principal. They bring the world of bond investing to the
small investor. Most bond funds are conservative, focusing on payment of
dividends. Investors can choose among several types of bond funds. Below are
some of the most popular.
Municipal bond funds invest in debts issued by
state and local governments. Their dividends are usually free from federal
taxes.
Government bond funds invest in debts of the U.S.
Government and its agencies. These funds include mortgage-backed securities as
well as bills, notes and bonds of the U.S. Treasury.
Corporate bond funds invest in debts issued by
companies in the private sector. |
