I think the two primary reasons to buy into a bond fund are (1) to spread the credit risk over many issuers, and (2) to have benefit of the services and, hopefully, the wisdom of a professional bond investment manager, such as a Bill Gross. While individual bonds pay off in whole at maturity, they will fluctuate in value during their life cycle as interest rates change, and a possible downgrade in their bond credit rating. So the bond's value is not a certainty prior to its maturity.

Also, some bond funds provide strategies for investing in international bonds (currency exposure), high-yield bonds (more equity like in risk/return) and tax-free income production. The same strategies can be achieved through individual bonds, but with the requirement of more homework for the buyer.