Offers higher yield potential than money market or shorter-term bond funds but with more volatility. Yield and share price will vary with interest rate changes.
If interest rates rise significantly from current levels, bond fund total returns will decline and may even turn negative in the short term.
High-yield bonds carry greater default risk than higher-rated bonds along with greater liquidity risk.
To the extent the fund holds foreign bonds, it will be subject to special risks, including potentially adverse political and economic developments overseas, greater volatility, lower liquidity, and the possibility that foreign currencies will decline against the dollar. Investments in emerging markets are subject to the risk of abrupt and severe price declines.
For investors seeking to enhance the performance of their fixed-income portfolios and willing to take on the special risks associated with high-yield bonds and foreign securities.
Appropriate for both regular and tax-deferred accounts, such as IRAs.