Income Fund


DEFINITION of 'Income Fund'

A type of mutual fund that emphasizes current income, either on a monthly or quarterly basis, as opposed to capital appreciation. Such funds hold a variety of government, municipal and corporate debt obligations, preferred stock, money market instruments, and dividend-paying stocks.


Share prices of income funds are not fixed; they tend to fall when interest rates are rising and to increase when interest rates are falling. Generally, the bonds included in the portfolios of these funds are of investment grade. The other securities are of sufficient credit quality to assure a preservation of capital.

There are two popular high-risk funds that also focus mainly on income: high-yield bond funds and bank loan funds. The former invests primarily in corporate "junk" bonds and the latter in floating-rate loans issued by banks or other financial institutions.

  1. Interest

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  2. Dividend

    A distribution of a portion of a company's earnings, decided ...
  3. Income

    Money that an individual or business receives in exchange for ...
  4. Income Investment Company

    A money management firm whose primary investment goal is to generate ...
  5. Growth And Income Fund

    A mutual fund or ETF that has a dual strategy of capital appreciation ...
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    A nationally recognized, well-established and financially sound ...
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