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Income Fund Definition

The definition of an income fund is a mutual or other fund that has it's core investments in established dividend paying stocks and fixed income. These funds and the stocks within it pay regular dividends. They are more predicatble, but offer less of a chance for high capital gains later on.

These funds normally perform within a range in up and down years for the stock market. An income fund can fit into any portfolio, but it is best for people who would like or need income and who do not want to take on too much risk in the future.

Bond Funds

BOND FUNDS invest mainly in fixed-income securities of publicly traded companies and municipal issuers. The investment objective for fixed-income securities includes wealth or asset preservation. Bonds, especially highly rated bonds, are typically secure investments that may not lose principal value. Of course, as interest rates decline, the value of bonds increases, and as interest rates increase, the value of bonds declines.

The value of a bond fund is based on the underlying value of the bonds held in the fund. If interest rates increase, the net asset value of the bond fund decreases in value. Bond funds vary with their investment objectives and include corporate bond funds, global bond funds, government bond funds, and tax-free bond funds.

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