Explore commonly used personal finance terms.
An active bond fund is a mutual fund that invests in bonds with an active management strategy, where fund managers make regular buying and selling decisions to maximize returns. Unlike passive bond funds, which track bond indexes, active bond funds aim to outperform the market by adjusting holdings based on interest rates, credit quality, and economic forecasts. This approach offers potential for higher returns but often comes with higher fees due to the fund manager’s active involvement and expertise in bond selection.
