What is a bond fund?

A bond fund, also referred to as a debt fund, invests primarily in bonds (government, corporate, municipal, convertible) and other debt instruments, like mortgage-backed securities (MBS), with the primary goal of generating monthly income for investors. Bond funds provide instant diversification for investors for a low required minimum investment.

Is fxnax a good bond fund?

Fidelity U.S. Bond Index Fund (ticker: FXNAX) FXNAX is a conservative core holding for a bond market index fund portfolio. Don McDonald, host of the "Talking Real Money" podcast, prefers this Fidelity bond fund because 72% of the portfolio is rated AAA and the fund has a moderate 5.75-year duration.

What are municipal-bond ETFs and mutual funds?

Municipal-bond ETFs and mutual funds invest in bonds issued by state and local governments to finance capital expenditures. Unlike taxable bonds, municipal bonds provide tax advantages that can be especially appealing to higher-income investors who are investing via taxable accounts.