The Different Types Of Government Bond Funds

There is a surprising array of managed investment funds dedicated to investing in government issued bonds.

Generally government bond funds are classified as follows:

  • Long Government Bond Funds
  • Intermediate Government Bond Funds
  • Short Government Bond Funds
  • Inflation Protected Bond Funds

As you can appreciate from their respective names each type of government bond fund takes a different “time approach” to investing in government issued bonds.

You should generally expect higher interest rates to attach to bonds with longer maturity dates, i.e., “Long Government Bonds”. In (large) part the higher rate will be attributable to the inherent riskiness of longer term investments. In other words, longer term investments are exposed to risks that can occur due to circumstances that change over time. A bond may offer a higher interest rate but that benefit may be offset by “inflation risk” which would undermine the “principal value” of the bonds.

You can find firms that offer/manage government bond funds simply by searching for the generic descriptive names of the funds, outlined in the bullet points above.

Some examples of government bond funds include:

  • Schwab Inflation Protected
  • Legg Mason WA Government Securities C
  • PIMCO Long-Term US Government A