BACKNEXT

Bonds vs. bond funds: Which is better?

Well, the pros of bond funds are the same as for stock funds. Namely, you get professional research and management, and you get lots of diversification for your dollar. You can also reinvest bond payouts automatically - something you can't do with individual bonds. Lastly, it's easier to sell shares of bond funds than individual bonds.

The biggest drawback to bond funds is that they don't have a fixed maturity, so neither your principal nor your income is as certain as it would be with individual bonds. Fund managers are constantly buying and selling bonds in their portfolios. That means your interest payments will vary, as will the fund's share price.

Market indexes are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer LIBOR Warning: Neither BBA Enterprises Limited, nor the BBA LIBOR Contributor Banks, nor Reuters, can be held liable for any irregularity or inaccuracy of BBA LIBOR. Disclaimer. Morningstar: © 2014 Morningstar, Inc. All Rights Reserved. Disclaimer The Dow Jones IndexesSM are proprietary to and distributed by Dow Jones & Company, Inc. and have been licensed for use. All content of the Dow Jones IndexesSM © 2014 is proprietary to Dow Jones & Company, Inc. Chicago Mercantile Association. The market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved. FactSet Research Systems Inc. 2014. All rights reserved. Most stock quote data provided by BATS.