Income Fund

An income fund is a type of mutual fund or exchange-traded fund (ETF) that primarily invests in securities that pay dividends or interest, such as bonds, dividend-paying stocks, and other income-generating assets. The goal of an income fund is to provide regular income to investors rather than focusing on capital appreciation. Income funds are popular with retirees and conservative investors seeking a steady stream of income with relatively low risk.

Example

A bond income fund invests in government and corporate bonds, providing investors with consistent interest payments over time.

Key points

• Invests in income-generating securities like bonds and dividend-paying stocks.

• Focuses on providing regular income rather than capital appreciation.

• Suitable for conservative investors, retirees, or those seeking steady income.

Quick Answers to Curious Questions

What is the primary goal of an income fund?

The primary goal is to provide regular income to investors through dividends or interest, making it ideal for those seeking steady cash flow.

Who typically invests in income funds?

Retirees, conservative investors, and those looking for consistent income with lower risk often invest in income funds.

What types of assets do income funds invest in?

Income funds typically invest in bonds, dividend-paying stocks, and other securities that generate regular interest or dividend payments.