What is Fixed Income?
Fixed income securities are often better known as Bonds and Gilts. These are issued by companies and governments respectively as a way of raising money. These securities are bought by investors who lend their money to the issuer. So in effect a bond or gilt is a loan for which the investor is the lender.
Our Capabilities at Molton Wealth Financial Services:
- Day-to-day monitoring of changes in issuers’ financial profiles and in the bond market (company news, bond prices and bond market yields);
- A world-wide network of bond experts working together with a common aim and drawing on in-house and external research;
- A worldwide network of bond specialists working as a team with a common goal and using in-house and external research and analyses;
- Assessment of how expensive different bond types are (with a view to avoiding those bonds whose prices could suffer a sudden downturn);
- Selecting lists of bonds recommended as Buy (sectors, issuers, duration, ratings, etc.) on the basis of shared convictions and for clients with different risk profiles;
- Identifying the type of bond to hold or to avoid depending on the economic cycle evolution.
How does Fixed Income work?
The issuer pays the investor for the benefit of using their money in the form of interest payments. This is known as the coupon. The interest payments are made at a predetermined rate and schedule. The maturity date is when the issuer must pay back the loan to the investor. Bonds and gilts are known as fixed income securities because investors know in advance how much they will get back if they hold the security until maturity.
The main difference between bonds and any other loan is that bonds are tradeable and a bond's price changes daily. You do not have to hold the bond until maturity you can buy and sell at any time on the open market without needing to refer to the original issuer. Bonds and gilts are generally less volatile than equities and provide a more secure income return than cash. Bonds tend to complement well-diversified portfolios as an additional asset class next to equities. Fixed income often serve as a conservative investment because they typically provide a secure income and capital return but bond prices can go up and down.
How to apply
You can call Molton Wealth Financial Services directly on +44 (0)20 3874 4495 or email and request a call back.