Glossary
Bond fund
A fund that holds many bonds at once, with a share price that moves with the value of the bonds it holds and usually no maturity date of its own.
Updated September 15, 2026
A bond fund holds many bonds, which are loans to a government or a company that pay interest. You own shares in the pool rather than the individual bonds, and the share price moves with what those bonds are worth.
Unlike a single bond, most bond funds have no maturity date, so there is no day when they hand your money back. You get your money by selling shares at the price set for that sale. If bond prices fall 5 percent, $1,000 of shares is worth about $950.
Bond funds generally lose value when rates rise, because bonds already issued pay less than new ones. A fund can also lose money if an issuer fails to pay, and it charges a yearly fee.
Related terms
Used in these lessons
Members
Why bond prices fall when interest rates rise
Weekly report
The week, explained: September 7 to 11, 2026
Weekly report
The week, explained: September 14 to 18, 2026
Weekly report
The week, explained: September 28 to October 2, 2026
Members
Asset allocation and rebalancing
Members
Bond funds, corporate bonds and credit ratings
Members
Target-date funds and how they change over time
How this definition was made
- Written by an AI model (Claude) following Teloria's editorial standard.
- Every factual claim was checked by a separate AI fact-check against official US government and regulator sources.
Official sources consulted
- investor.gov · /introduction-investing/investing-basics/glossary/bond-funds-and-income-funds
- investor.gov · /introduction-investing/investing-basics/glossary/bonds
- investor.gov · /introduction-investing/investing-basics/investment-products/mutual-funds-and-exchange-traded-funds-etfs/mutual-funds
- investor.gov · /introduction-investing/investing-basics/glossary/net-asset-value
- finra.org · /investors/investing/investment-products/mutual-funds
- investor.gov · /sites/investorgov/files/2019-02/mutual-funds-ETFs.pdf
- investor.gov · /publications-research-studies/info-sheets/ultra-short-bond-funds
- investor.gov · /introduction-investing/general-resources/news-alerts/alerts-bulletins/investor-bulletins/mutual-fund-and-etf-fees-and-expenses-investor-bulletin