A fixed income investment is a fund or portfolio in which bonds are primarily purchased as investments. There is no fixed maturity date and no repayment guarantee.
Common fixed income investments include Treasury Bonds, Government & Agency bonds, Municipal Bonds, Corporate Bonds, Mortgage-Backed Securities, Certificates of Deposit (CDs), and Preferred Stock.
Fixed income funds typically carry less risk and are a good option for a steady source of income. Fixed income funds are great for investors who have less time to recoup losses if the market becomes volatile. Although fixed income funds are less risky, they can lose value over time due to inflation. These funds can also lose value if the bond manager sells a significant amount of bonds in a rising interest rate environment.