Since the vast scale of the U.S. bond market, its well-established financial market mechanisms, and excellent liquidity, U.S. Treasury bonds are considered a safe investment tool. As for corporate bonds, the market value of companies listed in the U.S. accounts for nearly half of the global market.
The yield of U.S. Treasury bonds is also one of the main benchmark indices in the financial markets. Therefore, when we talk about bonds, we are primarily referring to U.S. bonds.
Next, let's understand how to buy bonds.
There are three ways to buy bonds: individual bonds, bond funds, and Bond Index Funds (ETFs).
1. Individual Bonds
Taking the United States as an example, the general public can easily purchase government and corporate bonds in the secondary market. U.S. Treasury bonds, in particular, are of a massive scale and are considered one of the safest investment tools in the world.
2. Bond Funds
Bond funds involve buying a portfolio of bonds through a fund platform. These are managed by fund managers and teams who conduct research and operations, with additional management fees and transaction fees.
3. Bond Index Funds (ETFs)
Bond ETFs are purchased through stock brokerage firms. Their managers do not make subjective decisions but rather operate with a passive investment strategy. The management fees and transaction costs for bond ETFs are significantly lower than those for bond funds.