Question of the Week: What are fixed income mutual funds?

Our look at different types of mutual funds continues today with fixed income funds.

A fixed income mutual fund invests in securities that pay a fixed rate of return. This could include government bonds, investment-grade corporate bonds, or high-yield corporate bonds for example. In a fixed income fund, income is paid on a regular basis through interest earned by the fund’s holdings. A fixed income fund allows an investor to diversify their bond investments. They can be a low risk investment, but the risk level can be slightly higher on investments in high-yield corporate bonds.

The Nova Scotia Securities Commission does not provide investment advice. We are not advising or recommending that investors purchase the mutual funds in our posts. The posts are simply to educate investors so they can be an informed investor when making investment decisions.