No maturity dates

Another disadvantage of mutual funds relates specifically to bond funds — that is, funds that specialize in bonds rather than stocks or other investments. Typically, when you invest in an individual bond, you are given a maturity date — that is, the date when the loan represented by the bond comes due. On that date, you get back the amount you paid for the bond (the principal), plus interest. The return is certain, unless the company or the government body that issued the bond runs into financial difficulties. An investment in a bond fund works differently. The fund manager is continually buying and selling bonds with a variety of maturity dates. Periodically, you receive a portion of the interest earned by the fund. However, no specific maturity date exists for your shares in the fund, and thus no certainty about the amount you can expect to receive when you decide to sell your shares. You may end up selling your shares in the fund for more or for less than you paid.