Debt securities are issued from time to time to finance certain types of capital expenditure. One such security is municipal bonds issued by a state, municipality, or county. A debt obligation arises after municipal bonds are issued for facilitating projects that are in the interest of the public. Popular examples of capital expenditure include the construction of highways, bridges, schools, and hospitals among other public interest projects.

Fixed income mutual funds that are invested in debt securities are known as money market mutual funds. The main characteristics of money market funds are that they have short maturities and the credit risk is also minimal. They also are a part of the lowest-volatility types of investment. Depending on the type of securities the fund invests in, money market funds are either taxable or exempted from tax.

Passive investing strategies are common and popular among investors when it comes to exchange-traded funds (ETFs). Passive ETFs track multiple indexes, and have a low turnover and a low cost attached to them. In the past, passive strategies gained an edge over actively managed ones due to their better performance.

Among the numerous bond exchange-traded funds (ETFs), the ones issued by corporations have become pretty popular in the past few years. This is because when compared to government bond ETFs, such investments render better returns. Moreover, they are safer than stocks and if the company were to go bankrupt, it will first pay off its bonds, even before they settle the dues with the stockholders.

An income fund is a mutual fund that focuses more on current income than the growth of the money invested. It targets stocks and bonds as investment opportunities because of the high levels of dividend and interest they give. It is an asset allocation fund and may be in the form of bond funds, stock funds or even real estate funds.

What is fixed income? Fixed income is one best method for investment or budgeting practice for which an annual percentage return or income is received at regular intervals. Fixed income funds are commonly known as bond funds. They are simply mutual funds that hold fixed income securities such as municipal bonds, corporate bonds, and US treasuries.

A mutual fund is an investment based fund that pools money from various investors to buy securities. It is professionally managed and provides the investor more diversification and liquidity. It continues to be one of the more popular tools of investment for those who want to beat the market or for those who are looking for a wide range of investments instead of buying stocks and shares.

An exchange-traded fund or ETF is a form of an index fund that provides investors with a standard return at a minimal cost though it differs from index funds in that trading in ETFs is commission free while index funds make for expensive trading. An ETF is also like a mutual fund except that it trades on major stock exchanges.