Income risk

Income risk

The possibility that a portfolio's dividends will decline as a result of falling interest rates. Income risk is generally greatest for money market instruments and short-term bonds, and least for long-term bonds.

Income Risk

The risk that the yield of a fund investing in short-term debt securities will decrease because of a decline in interest rates. For example, suppose a mutual fund invests in money market securities with maturities of less than a year. If interest rates decline, then the yield on the money market fund will also decline because when the money market securities mature, the returns are reinvested at lower interest rates. Income risk is the same concept as interest rate risk, but the former applies to funds, while the latter pertains to individual debt securities.
References in periodicals archive ?
Investment in the Fund is subject to investment risks, including, without limitation, management style risk, market risk, income risk, mortgage-backed securities risks, fixed income risk, credit risk, interest rate risk, maturity risk, yield curve risk, prepayment risk, liquidity risk, U.
Marjan Nikolov from the Center for Economic Analyses says the Government should also bear in mind the tax income risk indicators.
Income risk - often landlords rely on rental income rather than capital income and therefore this has to be protected 4.
A summary of findings thus far is that default significantly worsens allocations for income risk and preference parameters that are empirically plausible for U.
has released a study showing that adding a lifetime guaranteed minimum withdrawal benefit to a traditional stock and bond retirement portfolio can increase income while decreasing income risk.
Other papers cover new measures to improve productivity, country-level production efficiencies, the impact of land fragmentation on rice production, future prospects for grain and means of handling peak demand for it, income risk and acreage in terms of soybeans and corn, commercial crops and grain crops, farmers' insurance, and price behavior in China's wheat futures market.
PEOPLE on a moderate income risk being worse off than the poorest workers in their twilight years, a new report says.
Retail institutions, such as pension funds or insurance companies, could offer people contracts to hedge their aggregate income risk.
The Dimensional Target Date Retirement Income Funds use asset allocation strategies to invest in income-growth investments(global equities and fixed income) as well as income risk management investments.
Fatih Guvenen, University of Minnesota and NBER, and Anthony Smith, Yale University, "Inferring Labor Income Risk from Economic Choices: An Indirect Inference Approach"
Fourth, the implications of taxation regime depend, in some cases strongly, on the level of income risk faced by households.
These reports provide detailed information on each borrower, including employer and personal information verification, comparative occupational pay scales and an overall income risk assessment, explained Romano.