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	Simple? As we said earlier in theory, yes but with interest rates ever changing the bond market is mostly for professionals and bonds generally trade in parcels of RM500,000 or more. For the smaller and less experienced investor, most investment advisors agree that bond funds are the way to access the bond market. What is a bond fund? It is similar to a unit trust but it does not invest in shares. It is a fund where the investments are only fixed income securities listed on KLSE, corporate bonds traded in the money market, Malaysian Government securities, treasury bills, foreign fixed income securities/bonds, Malaysian currency deposits, Cagamas bonds or bankers' acceptances. At the present time there are three bond funds in Malaysia namely, the Malaysian Bond Fund, Malaysia Commerce Fund and KL Bond Fund. When considered from total return perspective, a bond fund in the medium to long term has an advantage over fixed deposits as it will generally pay a higher rate of return. At the same time bond funds avoid the higher risks associated with investing in shares. For example, the largest bond fund, OCBC Unit Trust Management Bhd's Malaysian Bond Fund, has had an annualized rate of return of around 9% p.a. at a time when fixed deposit rates have been around 7.3%. It follows that theoretically unit prices of bond funds should move in the opposite direction to interest rates because as interest rates fall, the value of bonds owned by a fund will rise and therefore the unit price will increase or if interest rates rise the value of bonds owned by a fund will fall and therefore the unit price will fall. However this may not be true because these funds are managed by experienced fund managers who are specialists in bond investments. To some extent, good fund managers may be able to cushion the effects of interest rate rises on their fund's unit price through effective portfolio management. Nevertheless, the onus is on investors to choose a bond fund with strong track record but with a small service fee to maximise their investment returns. A service fee is the difference between the offer and bid prices. The service fees of bond funds in Malaysia range between 2%-5% but service fees for equity funds are higher typically within 3%-7% because investors are able to recoup these upfront charges more quickly than bond funds with similar charges. This is due to the nature of higher risk and returns associated with equity investments. Therefore if carefully selected investment in bond funds are an attractive alternative to other forms of fixed interest investment which will generate higher returns to a fixed deposit. It is expected that between RM20 billion to RM30 billion will be raised through the local bond market under the Seventh Malaysian Plan (1996 to 2000). Malaysia's high saving rate, buoyant economy, stable interest rates and sound monetary policies are positive factors for the bond market to continue its rapid pace of development. As a result, investors will enjoy greater choice and diversity of investment products.