Fixed Investments - Steady and consistent

Fixed income is an investment approach focused on preservation of capital and income. It typically includes investments like government and corporate bonds, CDs and money market funds. Fixed income can offer a steady stream of income with less risk than stocks.

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Fixed Income Investments

Fixed income Investments are agnostic of market conditions so they effectively diversify your portfolio and ensure steady return. Every sound investment strategy has strategic place for fixed- income investments as they safeguard investor’ capital, yields guaranteed return on investments and maintain a steady flow of income. Returns on fixed-income investments are generated periodically, and the interest payable on these securities remain constant, irrespective of market fluctuations.

Identity Investment offer strategic investments solutions for investing in various fixed income securities to leverage for a longer and safer investment portfolio depending on various individual risk profiling factor. To assess your strategic investment solutions

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Fixed Income Investments offer a fixed rate of return with the interest getting accumulated over a predetermined period of time. These can be used by investors to diversify their portfolio given these are not as risky as derivatives and equities. Because the returns in fixed income investments are reliable, it is particularly popular amongst the retired investors. It is important to understand that fixed income funds are not a different category of funds in the mutual funds domain. Their identity is defined by their investment style and expected returns. Some common fixed income generating products are:

Characteristics of Fixed Income Investment Funds

  • The taxes imposed on fixed income funds are for debt funds with short term capital gains being added to your income and taxed based on the tax slab. The long-term gains are taxed at 10 percent without indexation and 20 percent with.
  • The focus of fixed income investment is not as much capital appreciation as generating a fixed income to the investor.
  • In fixed income investments, debt funds offer a better return than money market funds in the long run, but it is ETFs which garner more profit with their equity like functioning.
  • These are actively managed by fund managers who regularly adjust the portfolio to manage the portfolio in line with the changes in the interest rates and the economic conditions.
  • Being highly liquid in nature, these can be accessed by the investor and withdrawn whenever they require.
  • The aim of the fund is to keep the returns stable in the face of market fluctuations and adverse economic conditions.

Any fixed income investment, by its very nature cannot assure abnormally high returns to an investor. The Indian investor has a wide range of options ranging from extremely liquid bank accounts and bank deposits to Gilts (Government of India bonds), small savings instruments like National Savings Certificates (NSCs), Kisan Vikas Patra (KVP), compulsory savings instruments like Provident Fund, Public Sector Unit (PSU) Bonds (taxable and tax free), Company Fixed Deposits (FDs), corporate debt and open-ended fixed income Mutual Funds (MFs) for fixed income investment. While government backed bonds and bank deposits give low returns; Debt Mutual Funds, Corporate bonds and Company FDs give high returns