Part 6/10:
Bond funds offer diversified exposure to fixed-income assets, with prices typically rising when interest rates fall. If interest rates indeed decline, bond prices tend to appreciate, potentially delivering capital gains.
Risks: Bond investments are not capital-guaranteed. Rising interest rates can lead to a decline in bond prices, resulting in potential capital losses. Effective management and diversification across bond types and maturities mitigate some of these risks but do not eliminate them entirely.