I will try to explain. Bond funds invest in bonds (obviously) and the returns are interest paid by the bonds and the capital gain (or loss) of the bonds (if any).
When interest rate goes down bond prices generally go up (capital gain) and that is what happened recently (RBNZ lowered interest rates). The returns are not linear (but much less volatile)
I hope that makes sense. My investments are predominantly in shares.
Discl - not associated with simplicity
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