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Fixed Income Funds are those which make periodic payments to its investors. They are especially for those who wish to have periodic income at regular intervals; this makes it one of the most preferred funds among retired persons. Fixed income funds also come with set of risks. These funds typically distribute interest income and provide potential for capital gains.
The major disadvantage of FIFs is that the principal amount may lose buying power and the interest payments may gradually decline during inflation and economic slowdowns.
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