Income fund

Income fund

A mutual fund that seeks to provide to liberal current income from investments.

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income fund

An investment company, the main objective of which is to achieve current income for its owners. Thus, it tends to select securities such as bonds, preferred stocks, and common stocks that pay relatively high current returns. This type of fund is most appropriate for someone seeking high current income rather than growth of principal. Also called income-mixed fund.

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Income fund. Income funds are mutual funds whose investment objective is to produce current income rather than long-term growth, typically by investing in bonds or sometimes a combination of bonds and preferred stock.

Investors, especially those who have retired or are about to retire, may prefer income funds to potentially more volatile growth funds.

The amount of income a fund may generate is related to the risk posed by the investments that the fund makes and the return they generate.

A fund that buys lower-grade bonds may provide substantially more income than a fund buying investment-grade bonds. But the same fund may also put your principal, or investment amount, at substantial risk.