Fixed Income Assets

RECENT NEWS
The Hindu Business Line  Oct 19  Comment 
The RBI has held key rates, but macroeconomic developments make a case for investing in long duration funds
Reuters  Oct 17  Comment 
Morgan Stanley , which has spent three years throwing out bad apples from its fixed income trading portfolio, now wants to put the freed up money into businesses that bear healthier fruit.
Mondo Visione  Oct 16  Comment 
London Stock Exchange welcomes 150th fixed income ETF to its markets - SPDR Thomson Reuters Global Convertible Bond UCITS ETF Confirms London Stock Exchange’s position as leading venue for fixed income ETFs London Stock Exchange today...
SeekingAlpha  Oct 13  Comment 
By Jim Sloan: I won't keep you in suspense: my subject is I Bonds. Yes, they're the inflation-protected version of lowly U.S. Savings Bonds. You should like them already, because they are the dullest conceivable investment. The key reason they are...
Forbes  Oct 9  Comment 
Cutwater has been able to grow its asset base to $23 billion over the years by offering a wide range of fixed income strategies such as core, long duration, high yield, loans and absolute return strategies. The acquisition of Cutwater will boost...
Wall Street Journal  Oct 9  Comment 
“If you believe that historically high fixed-income returns are poised to diminish, increasing exposure to real assets is an attractive strategy to compensate.”
Financial Times  Oct 5  Comment 
Revenues lifted by turmoil at Pimco and Fed tapering
Forbes  Oct 1  Comment 
Individual investors boosted their fixed-income and cash allocations last month, according to the September AAII Asset Allocation survey.
SeekingAlpha  Sep 30  Comment 
By WisdomTree: By Rick Harper In recent research released by the Federal Reserve Bank of San Francisco and echoed in statements by several Fed regional bank presidents, Fed officials have voiced concerns that the market is underestimating the...




RELATED WIKI ARTICLES
 
TOP CONTRIBUTORS

Fixed Income assets refer to assets that provide their owners with a fixed stream of income. Bonds are the most common example of a fixed income asset. Companies and government entities will issue bonds or IOUs to investors. These bonds typically pay a fixed rate of interest or coupon rate to investors for a fixed period of time, thus the name fixed income. At the end of the period, the investor receives his principal (the orginal amount of money paid for the bond).

Ratings and Risk

Fixed income assets typically receive ratings from major ratings agencies. These ratings signify the amount of risk represented by the assets. For instance a U.S. treasury bond which is considered to be one of the safest investments, carries a AAA rating, some states likewise carry high ratings. The higher the rating of the bond issuer, the lower the rate of interest required by the purchasers. A smaller, less established company, for instance, might only have a rating of BBB, and would have to pay bond investors significantly higher annual interest rates. Bonds with exceptionally low ratings are known as junk bonds and typically pay the highest interest rates--sometimes in the double digits.

Equities vs. Bonds

Equities and bonds are the two major asset classes available to investors. While there are others (real estate, private equity, and venture capital) these two classes are very common and extremely liquid (can be converted to cash easily). Equities are typically considered to be the riskier of the two asset types (with the exception junk bonds and other lowly rate bonds) and have traditionally generated higher returns than fixed income assets.

Returns

Fixed income assets historically have had a much lower rate of return than stocks (equities). This is because with


Example

Wikinvest © 2006, 2007, 2008, 2009, 2010, 2011, 2012. Use of this site is subject to express Terms of Service, Privacy Policy, and Disclaimer. By continuing past this page, you agree to abide by these terms. Any information provided by Wikinvest, including but not limited to company data, competitors, business analysis, market share, sales revenues and other operating metrics, earnings call analysis, conference call transcripts, industry information, or price targets should not be construed as research, trading tips or recommendations, or investment advice and is provided with no warrants as to its accuracy. Stock market data, including US and International equity symbols, stock quotes, share prices, earnings ratios, and other fundamental data is provided by data partners. Stock market quotes delayed at least 15 minutes for NASDAQ, 20 mins for NYSE and AMEX. Market data by Xignite. See data providers for more details. Company names, products, services and branding cited herein may be trademarks or registered trademarks of their respective owners. The use of trademarks or service marks of another is not a representation that the other is affiliated with, sponsors, is sponsored by, endorses, or is endorsed by Wikinvest.
Powered by MediaWiki