What is an income fund?

An income fund is a type of mutual fund or exchange-traded fund (ETF) that aims to provide income from investments. The fund emphasises current income rather than capital appreciated, working on either a monthly or quarterly basis.

Where have you heard about income fund?

Income funds are common since they make it easy for investors to invest in a diversified pool of dividend or interest-paying securities.

What you need to know about income fund.

Income funds can hold bond funds or stocks funds (or more specifically equity income funds), with typical income funds holding both stocks and bonds. Generally, income funds hold stocks with a good history of dividend payments and the funds are often used as the endpoint for target-date funds. Share prices of income funds are not fixed; generally tending to increase when interest rates fall and dropping when interest rates rise. High-yield bonds and bank loan bonds are two types of high-risk funds that focus mainly on income.

Find out more about income fund.

Explore other fund types by reading about debt fund, bond fund and money market fund.