The assets of a fixed income fund are invested in bonds. Bonds usually offer regular (for example annual) interest payments and the repayment of the nominal value on maturity. Those who invest in bonds become the issuer's creditors.
The benefits of fixed income funds:
- Access to a chosen market segment (such as government bonds or corporate bonds)
- Risks relating to individual equities are mitigated by the number of issuers
- Individual securities are selected by experts
- Portfolio is continuously adapted to changes in the market
- Cash management by the fund manager. In the event of the repayment of bonds or coupon payments, the money is reinvested "automatically"