Bonds are a lot less volatile and tend to come into their own when equities are in a hole. In fact graphs will often show an inverse position with equities and bonds. The fact is investors need a diversified portfolio more than ever and bonds, as part of fixed income investments, can fill the bill nicely.
Using a fixed income fund gives ordinary investors access to bonds they would never be able to invest in as a solo player. The power of investors combining together to pool funds, managed by a professional fund manager, is appealing, as are the tax advantages in some scenarios.
Article updated 07/06/2012