Government Backed or Guaranteed . The U.S. government guarantees that if you buy its bonds, it will pay the amount shown on the face of that bond. This does not guarantee that the market price will remain constant, and for that reason, a fund fully invested in government securities may still fluctuate in value. This is because interest rates and the prices of existing bonds move in opposite directions. Call feature .
Call features pay back the bond's face value to the investor prior to the maturity date.
The issuer will do this if interest rates drop, so it can refinance at a lower rate. An option is a right to buy or sell a security at a later time at a specific price. A fund that uses options to hedge its existing portfolio may be generally conservative, but other uses of options can range from moderate risk to outright speculation. It is important to understand that the principal is the amount you invest. Interest represents your earnings.