Fixed-maturity bond funds may ease rate worries
For bond investors worried about what will happen to their principal when interest rates rise, a fixed-maturity bond fund is one solution.
These products, also called defined-maturity or end-date funds, offer the diversification of a bond fund with the known maturity date of an individual bond.
Each fund sets an end date and buys bonds that mature on or shortly before then. Any new money that comes into the fund is put into the same type of bond. Interest payments on the bonds are paid out monthly to shareholders. Read More…