We’ve recently uploaded a new fact file about income funds to the website.
This fact file is designed to help you understand how income funds work, and the effect of interest rates and credit markets on this type of investment.
What is an income fund?
‘Income fund’ is a term that encompasses a variety of investment vehicles that pool the resources of a group of investors to invest in income-earning assets such as bonds and even mortgages. There are many different types of income funds, but for simplicity we will focus on those that invest in government and corporate bonds.
Investors purchase units in income funds just as they would for any kind of managed fund. As the name suggests, traditional income funds are designed to provide investors with regular income (in the form of interest payments) while keeping the capital value relatively stable. Generally, capital growth is not a priority.
Click on the link to read more of the fact file about income funds.
