Look for:

Our offer for

Tutorial: Bond funds

What are bond funds?

Bond funds, as indicated by their name, are shares funds investing primarily in bond instruments. They are best for medium-term up to long-term investments in the investment horizon time of 3 years and more, depending on their focus. They can be regarded as the "foundation stone" of the investment portfolio; and they are also good for conservative investors as separate investments. The fluctuation rate of investment value in a bond fund differs pursuant to the investment strategy as defined by the Fund Statute. In general, we can say that it is higher than with money market funds, however in the medium-term horizon time they offer the opportunity of higher investment valuation than money market funds. Depending on the variety of bond instruments, the funds can focus on government bonds, corporate or high yield (speculative) bonds, bonds issued by developed or developing countries, or on their combinations. The fund portfolios are then completed with money market instruments.

How do bond funds work?

Bond funds endeavour to valuate money in the fund as much as possible, primarily by means of interest yields of bond instruments and capital valuation of the instruments. Since the funds can invest in bond instruments denominated in foreign currencies, they are mostly secured against currency risk with respect to the yield potential of bond instruments.

Your advantages

  • High liquidity – fast payout of money without penalties
  • If the recommended investment horizon time is kept, it is possible to achieve a higher yield than with money market funds
  • Wide diversification of fund portfolios up to tens of titles, reducing the risk of drop in the investment value
  • Wide selection of bond funds pursuant to their focus and investment strategies
  • Either lump sum or regular investments
  • High transparency

You should know

  • Bond funds should be represented in every investment portfolio with medium-term and long-term investment horizons, and their proportion will predominantly depend on the perception of market risks
  • The more conservative portfolio, the higher representation of bond funds or bond instruments
  • Guaranteed funds are collective investment funds
  • The value of investment in shares funds can go up or down, and return on the amount invested is not guaranteed
  • All details on shares funds and risks connected with investments in the funds, including information on the investment company managing the fund, are provided in the Fund Statute

Purchase conditions

Who can buy?

  • Citizens of the Czech Republic or foreign nationals over the age of 18 years (legal representative in the case of a minor)
  • Legal person, natural person–entrepreneur
  • Other entities established under the laws of the Czech Republic (foundations, movements, political parties)

What documents should be signed by the client

  • It is necessary to sign the Investment cervices contract and complete the Client knowledge profile. You can handle that at any branch of Česká spořitelna.

What is needed for signing the contract

  • Natural person
    Valid identity card (ID card or travel, diplomatic or service passport, residence permit)
  • Legal person
    Proof of legal personality – an extract from the Commercial Register (original or certified copy) not older than 3 months, and proof of entitlement to dispose of share certificates signed by representatives
    Document to verify identity (natural persons – e.g. company executive)
  • Other entities
    Proof of legal personality, which is issued by the appropriate authority that either approves or registers their activities. And here, there are no 3 months... isn't it possibly discrimination?

How do bond funds react to...

Fluctuations in value and thus yields of predominantly conservative bond funds depend primarily on the development and amount of interest rates.

… increasing interest rates?
In the short term, increase of rates in bond funds will have negative impacts, because the information can decrease prices of bonds held in the fund portfolio; in the long term such a situation is positive, because the fund is invested in the portfolio of bonds with higher yields.

… decreasing interest rates?
In the short term, decrease of rates in bond funds will have positive impacts, because in its portfolio the fund holds bonds with a coupon yield that is higher than the one achieved with newly issued bonds, which increases their value. In the long term, such a situation is negative, because the portfolio of the bond fund is revalued flexibly into market yields and prices. The bond fund yield then reflects the level of current (lower) market interest rates.


We use cookies and web analysis software to give you the best possible experience on our website. If you consent, these tools will be used. Please read more information here


Any information, material and services regarding financial instruments and securities provided by Česká spořitelna/Erste Group/ or any of its affiliates (collectively “Erste Group“) on this and any linked website hereafter (jointly the “Websites“) shall be exclusively to investors who are not subject to any legal sale or purchase restrictions.

By agreeing to this hereto, the visitor entering this Websites confirms that has read, understood and accepted this Information and the Disclaimer