Income Fund

外汇网2021-06-19 14:12:09 58

A type of mutual fund that emphasizes current income, either on a monthly or quarterly basis, as opposed to capital appciation. Such funds hold a variety of government, municipal and corporate debt obligations, pferred stock, money market instruments, and pidend-paying stocks.

Share prices of income funds are not fixed; they tend to fall when interest rates are rising and to increase when interest rates are falling. Generally, the bonds included in the portfolios of these funds are of investment grade. The other securities are of sufficient credit quality to assure a pservation of capital.

There are two popular high-risk funds that also focus mainly on income: high-yield bond funds and bank loan funds. The former invests primarily in corporate "junk" bonds and the latter in floating-rate loans issued by banks or other financial institutions.

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