What is fixed income?

It's a style of investing in which real return rates or periodic income is received regularly and at reasonably predictable levels. Retired people tend to favour fixed income investments because of the stable income stream they offer.

Where have you heard about fixed income?

Fixed income investing is always a prominent topic in the personal finance pages of weekend newspapers. New products are regularly launched - in July 2017, for example, BlackRock launched a floating rate bond fund, intended to defend against rising interest rates.

What you need to know about fixed income.

A bond is the most common type of fixed-income security; bonds are issued by governments, municipalities and corporations. Investors who buy a bond use the coupon payment (the interest) as a regular dependable payment. When the bond matures or is refinanced, the person has their money returned to them. There's also a wide range of fixed income derivative products, including options, swaps, futures contracts and forward contracts.

Among the risks of fixed income investment are inflation (that buying power will decline during the term of the security) and default risk (that the issuer will be unable to pay the scheduled interest payments or principal repayment).