What are Fixed Income Investments?
An investment that provides a pre-arranged return at specified intervals is known as a fixed income investment. This category of financial product offers investors moderate risk and predictable growth regardless of market conditions.
Fixed income products are generally managed with the aim of maximising certainty. There are a number of different investment options, each offering varying degrees of risk, though income fluctuations are typically lower than those in equity markets.
Investing in Fixed Income
Popular fixed income investment opportunities include:
- Loan notes, which are legally-backed IOUs from one party to another, with repayments to be made over a set period of time at an agreed interest rate.
- Government bonds, where money is loaned to the Government until an agreed date in exchange for fixed interest payments.
- Exchange-Traded Funds (ETFs), which track the performance of an entire index on the stock exchange, providing the same return as that index, minus any fees.
- Certificates of Deposit are like savings accounts, but with the bank agreeing to pay a higher interest rate in exchange for keeping your money for a specified amount of time.
- Money market funds are short-term investments that guarantee a fixed return on maturity in exchange for investing an amount of money for an agreed period of time.
If protecting your investment whilst enjoying a steady income appeals to you, fixed income products could be the answer.