Fixed Income Fund for a Changing World
Fixed income is an investing approach focused on preservation of capital and income. If you are seeking a steady and reliable stream of income with lower risk than stocks, you may want to consider fixed income.
Fixed income investments. Fixed income investments are an important part of a well-diversified portfolio. Fixed-income investments pay interest at specified times in fixed amounts and are usually issued by a corporation, municipality, government or government-sponsored agency.
Let’s start with the basics of fixed income.
Fixed income investments get their name because they're usually designed to generate a specific, or "fixed," level of interest income. Common fixed income investments include Treasury bonds, government and agency bonds, municipal bonds, corporate bonds, and mortgage-backed securities, as well as certificates of deposit and preferred stock or securities.
Take a closer look at the benefits.
There are three primary reasons why investors may want to include fixed-income investments in their portfolio: diversification, income generation and capital preservation.
Diversification. Equity markets often experience volatility and corrections. When this happens, it’s important to have investments within a portfolio that are designed to provide resilience. That is the essence of why investors should seek balanced, diversified portfolios. When one part of a portfolio struggles, another part can pick up the slack. Fixed-income investments are essential to the performance of an individual investor's portfolio. Fixed income investments can help smooth out the highs and lows in a stock portfolio.
Income generation. Another way fixed income fundamentally differs from equity is its explicit income component. Although some common and preferred stocks pay dividends, these income streams can fluctuate or disappear at a company’s discretion. Fixed-income investments provide a stable and regular stream of interest payments on set dates.
Capital preservation. Fixed income investments are ideal when preservation of capital is a priority. With fixed income investments, principal is returned at a set maturity date. Higher-quality fixed income investments have the best potential for protecting capital.
Inflation protection. Even modest inflation can erode wealth over time. Inflation has ebbed and flowed lately. The core Consumer Price Index (CPI) — the inflation measure that strips out volatile food and energy prices — moderated, dropping from 2.4% in mid-2018 to 2.2% in December 2018. A drop in fuel prices also prompted headline inflation to fall. That said, economic growth and a tight labor market should be supportive of inflation over time. Even if inflation were to remain stuck near the Federal Reserve’s modest 2% target for a decade, that reduces a portfolio’s purchasing power by 18% over those 10 years.
Fixed Income Solutions
Achieving your investment goals requires the right tools. We believe the quality, value and breadth of our fixed income solutions sets Baytree Capital apart from the rest, helping you build a more balanced portfolio that targets your specific needs.
If you are seeking to grow your assets over time to save for retirement or other long-term goals, you probably hold a significant amount of equity in your portfolio. Allocating a portion of your portfolio to fixed income investments can help offset losses when stock markets are erratic.
While it's possible for an individual investor to buy a single bond or other fixed income security, building a diversified portfolio of individual bonds requires a significant amount of assets. High minimum investment requirements and high transaction costs makes it difficult for individuals to buy many types of fixed income investments.
But individuals can still invest in fixed income investments through Baytree Capital. Baytree Capital offers cost-effective NO FEE high quality, fixed income investments with minimum investment requirements. Ask for your Baytree Capital Credit Income Fund prospectus today!