Bond funds can overcome the CPI

By Han
Published: 11:48, May 14th, 2008

GUANGZHOU (Fund China) - As the domestic CPI (Consumer Price Index) was rising up, Wu Shengtao, the manager of Huafu Income Enhanced Bond Fund said that bond fund is one of the investment products that can overcome the CPI. It is a good choice for those investors who can tolerate some risk and want to deal with the rising CPI to have some revenue.

Wu Shengtao also said that according to the bond market in Europe and the United States in the 1950s to 1960s, long-term bonds yield should be higher than the CPI. However, the domestic CPI has risen by 4.8 percent in 2007, while the revenue rate of the country bonds, finance bonds, corporate bonds is between 4-8 percent. So, taking the investment revenue into consideration, bond funds can help investors to deal with the rising CPI and share the bull market.

Some experts also said that the interest rate reduction policy of the Fed influence domestic interest rates, which is good for bond market. So, bond funds can attract investors’ attention.

Copyright Fund China 2008.

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