Fixed Income Products
A fixed-income security is a debt instrument issued by a government, corporation or other entity to finance and expand their operations.
Fixed-income securities provide investors a return in the form of fixed periodic payments and an eventual return of principal at maturity. The purchase of a bond, treasury bill, Guaranteed Investment Certificate (GIC), mortgage, preferred share or any other fixed-income product represents a loan by the investor to the issuer.
Why invest in fixed-income securities?
Fixed-income securities can be an important part of a well-diversified portfolio. For many investors, particularly retirees, fixed-income investments are a secure, low-risk way to generate a steady flow of income. As long as they are held to maturity, fixed-income securities will provide a guaranteed return on your investment, with payments known in advance.
Examples of fixed-income securities?
- Bonds
- Savings Bonds
- Guaranteed Investment Certificates (GICs)
- Treasury Bills
- Banker’s Acceptances
- NHA Mortgage-Backed Securities (MBS)
- Strip Coupons and Residuals
- Laddered Portfolio