Fixed income funds are mutual funds where you invest in debt securities. Theyre called fixed-income funds because debt securities pay fixed interest or dividend payments. In most cases, the debt securities are government or corporate bonds.
Example: Lets say the fixed income fund is made up of corporate bonds. One of those corporate bonds costs $2,000 and has a 3% interest rate. For the length of the bond, youll receive 3% per year for whatever you paid for it (in this case, thats 3% of $2,000). Youd receive $60 per year.