Yes, fixed income is a category of financial instruments. These instruments are designed to provide regular income to the investor. They are called “fixed income” because they pay a set interest amount over a specific period of time. At the end of that period, also known as maturity, the investor usually receives back the original amount invested.
Fixed-income instruments are commonly issued by governments, banks, and corporations. They include products such as bonds, GICs, and Treasury bills. These are used to raise capital while offering investors predictable returns.
What makes fixed-income instruments unique is the structure of the payments. Investors know how much they will receive and when they will receive it. This predictability makes fixed-income securities important for clients who need stability, such as retirees or conservative investors.
Fixed income is considered safer than many other types of financial instruments. It may not grow as quickly as equity investments, but it helps reduce portfolio risk. That is why many financial advisors use fixed income as a foundation for long-term client portfolios.
In short, fixed income is not just a financial strategy. It is a category of actual financial products that serve a key role in investment planning.
