Investors building a retirement portfolio assume that bond funds behave like bonds, but most bond funds do not. They lose value when interest rates rise, they don't have maturity dates, and there's no time at which you can cash in the fund for its par value. Most bond funds perform more like low-volatility low-return stock funds than individual bonds. However, there's a relatively new type of bond fund that offers performance similar to actual bonds, and these fill a longstanding gap in retirement investment planning.