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The Boston Globe

Business

Mutual Funds

What rising rates mean for your bond portfolio

NEW YORK — Investing in bond mutual funds is easy. At least, that’s the way it was for decades.

Investors could count on steady interest payments. Their funds also benefited from rising bond prices, because interest rates made a three-decade-long march downward since 1981. When yields fell, bond prices rose: Each step lower made the bonds held by mutual funds more attractive because they offered higher rates than newly issued bonds.

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