how to invest in fixed income
investors looking to add fixed income securities to their portfolios have several options today most brokers offer customers direct access to a range of bond markets from treasuries to corporate bonds to munis 1 for those who do not want to select individual bonds fixed income mutual funds bond funds provide exposure to various bonds and debt instruments these funds give the investor an income stream and professional portfolio management 2 fixed income etfs work much like a mutual fund but may be more accessible and more cost effective to individual investors these etfs may target specific credit ratings durations or other factors etfs also carry a professional management expense 3 investors can also use a laddering strategy when investing in fixed income a laddering strategy offers steady interest income that arises from investing in a series of short term bonds with different maturities then as bonds mature the portfolio manager reinvests the returned principal into additional short term bonds with maturities that extend the ladder this method provides investors with ready capital and they avoid losing out on rising market interest rates for example a 60 000 investment could be divided into one year two year and three year bonds the investor decides to invest 20 000 into each of the three bonds 