Fixed Income

Fixed Income

What is Fixed Income?

Fixed income securities, commonly referred to as Bonds and Gilts, are issued by companies and governments to raise funds. Investors purchase these securities, effectively lending their money to the issuer. Thus, a bond or gilt represents a loan with the investor as the lender.

Our Capabilities at Dover Wealth Financial Services: We conduct day-to-day monitoring of changes in issuers' financial profiles and the bond market, including company news, bond prices, and bond market yields. We maintain a global network of bond experts collaborating with a shared objective, leveraging both in-house and external research. We assess the relative valuation of different bond types to avoid those vulnerable to sudden price downturns. Furthermore, we curate lists of bonds recommended as Buy based on shared convictions and tailored to clients with varying risk profiles. We identify suitable bond types to hold or avoid based on the evolution of the economic cycle.

How does Fixed Income work? The issuer compensates the investor for utilizing their capital through interest payments, known as the coupon, disbursed at a predetermined rate and schedule. The maturity date signifies when the issuer must repay the loan to the investor. Bonds and gilts are categorized as fixed income securities because investors are aware in advance of the predetermined returns if held until maturity.

The primary distinction between bonds and conventional loans is their gradability and daily price fluctuation. Unlike traditional loans, bonds can be bought and sold on the open market at any time without consulting the original issuer. Bonds and gilts typically exhibit lower volatility compared to equities and offer a more reliable income stream than cash. They often complement diversified portfolios as an additional asset class alongside equities. Fixed income investments are generally perceived as conservative due to their predictable income and capital returns, although bond prices may fluctuate.

For inquiries, please contact Dover Wealth Financial Services directly by email and request a callback.