A fixed income investor agrees to purchase a fixed income asset from an issuer in exchange for interest payments (or coupons) over time and repayment of the principal at maturity. The investor acts as a lender and the issuer acts as a borrower. So, investors in fixed income are simply lenders of capital.
When you buy a fixed income investment, you are lending a certain amount of money for a specific amount of time. You receive scheduled interest payments of fixed amounts at fixed times - hence the term ‘fixed income’.
At end of the term, you - or the fixed income fund you’re invested in - get your money back; if the security was bought at issue, the full value is returned. If the security was purchased during its term, the face value is returned upon maturity.
Read more...
![](/uploads/Whitepapers/Perpetual_Fixed_Income_Fundamentals_cover.jpg)