Bond funds own a multitude of different bonds of varying yields and maturation. The value of a bond fund is derived from the Net Asset Value (NAV) of the basket of bonds held by the fund. Bond funds are not as safe as many believe them to be. When investors start selling their bond funds, the fund must liquidate bonds in order to pay the investor. When extreme selling occurs, the fund is forced to liquidate on a large scale, thus driving down the NAV of the fund. Bond funds are NOT where you want to be. They give the illusion of safety. They are anything but safe.