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A government bond fund is a
mutual fund that buys only IOUs issued by the U.S. government (such as T-bills, T-notes
and T-bonds) and/or its agencies (such as the Export-Import Bank and the Federal National
Mortgage Association).
Typically, the interest paid on government bond funds is lower than you'd get on corporate
bond funds with similar maturities because there's virtually no risk that the government
will default on its loans.
You should remember that, as a rule, it is never a good idea to invest in any fund until
you read its prospectus and understand the risks involved.
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