About Fixed Interest Securities

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About Fixed Interest

Summary Part 1

1. WHAT ARE FIXED INTEREST SECURITIES?

Fixed interest securities are issued by borrowers who need funds for a long period of time.

The issuer of these securities, usually a corporation, bank or government, is obliged to make a series of specified payments to the holder of the security over a specific period of time. At the end of this period, the initial amount borrowed will be fully repaid.

Investors can purchase these borrowings to receive a regular income stream and the eventual full return of their capital.

Fixed interest securities are fundamentally different from shares, but can be equally important for an effective portfolio.

Shares represent part ownership of a company, but when you buy fixed interest securities you are making a loan to a company, for which they will pay you interest, and will eventually repay you the principal of the loan.

OTHER TOPICS:

1. What are fixed interest securities?

2. What types are available?

3. Why invest in fixed interest securities?

4. Australians are underweight in fixed interest securities

5. What are the risks of fixed interest securities?

6. How to invest in fixed interest securities

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