Personal Fixed Income Investments

In an economy that is all but predictable, fixed income investments may offer a great opportunity to introduce relative stability to your portfolio. Fixed income investments can also help to reduce risk in your portfolio. Securities like U.S. government securities are considered a conservative investment. Fixed income investments are simply loans made by an investor (YOU) to a corporate or government borrower who agrees to pay interest that can be a fixed rate, floating rate or pay interest at maturity at which point they will pay the principal back in full.

Types of Fixed Income Investments

There are several types of fixed income investments to choose from, including U.S. Treasuries, Agencies, Municipal and Corporate bonds. Your SWBC Investment Services Financial Advisor will work with you to determine which type best suits you and your investment needs.

1. U.S. Treasuries: The Treasury bond (t-bond) is often considered one of the safest types of investments you can make. These bonds are debt securities of the U.S government and are issued through the U.S. department of Treasury. Because of the low-risk involved, interest rates generally tend to be low.
2. Agencies: Agency debt securities are issued by various government agencies and corporations granted a charter by the government. These investments are also generally considered low risk with high liquidity.
3. Municipals: Municipal bonds are issued by state and local governments and pay interest to investors semi-annually. The risk associated with a Municipal bond is dependent on the issuers ability to meet its financial obligations.
4. Corporate: Corporate bonds are debt obligations issued by corporations and can be more risky than other fixed income investments because they depend on the financial health of the company; however, the higher risk often means a higher payout in interest.

The Benefits of Fixed Income Investments

• Income – The regular interest payments from fixed income investments may help supplement an already existing income.
• Tax Advantages - The interest income generated by some fixed income investments issued by federal, state and municipal governments may be exempt from federal and/or state income taxes.
• Diversification – Fixed income investments help reduce risk in your portfolio. These types of securities, particularly government securities, are considered a conservative investment.

Securities offered through SWBC Investment Services, LLC, a registered broker/dealer. Member SIPC & FINRA. Advisory services offered through SWBC Investment Company, a Registered Investment Advisor. SWBC Investment Services, LLC & SWBC Investment Company are not affiliated with this institution. Funds should not be considered a deposit of or guaranteed by this institution, may lose value and are not NCUSIF insured.

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Frequently Asked Questions:

Q. How do fixed income investments provide predictable income?

A. Some fixed income solutions provide consistent interest payments. If sold prior to maturity, the value of the bond may fluctuate; yet the income is based on par value and remains consistent.

Q. Why is it important to incorporate fixed income investments into my portfolio?

A. A well-diversified fixed income allocation can reduce the investors overall portfolio risk and provide stability.