• Webpages
  • Documents
  • HDFC Life ClassicAssure PlusInvestment
  • HDFC Life ClassicAssure PlusInvestment
  • HDFC Life ClassicAssure PlusInvestment

For Online Policy Purchase

(New and Ongoing Applications)

Branch Locator

For Existing Customers

(Issued Policy)

Fund Performance Check

Income Fund

March 07, 2017
Income funds also known as debt funds or bond funds are ideal for conservative investors. Such investors are averse to taking on risk that is associated with equities.

What is an Income Fund?

An income fund is mutual fund or a ULIP (unit-linked investment plan) or any other type of investment that aims at generating an income stream for investors by investing in fixed income securities like government securities or gsecs/gilts, bonds, debentures, fixed deposits and the like.

They aim for safety of capital combined with reasonable growth in capital over a period of time and hence prefer income-generating investments like -

  • bonds
  • fixed deposits
  • government securities

Income funds are also offered by ULIPs. They are managed with well-defined controls and guidelines on where the fund manager can and cannot invest, although this varies across insurers and mutual funds.

How Does an Income Fund Work?

Typically, the fund manager invests in fixed income securities with higher credit ratings and established financial track records. Such companies have lower default risk in repayment of capital and interest.

The objective of the income fund is to maximize income. This reflects in two ways:

  • Capital appreciation which is when the NAV or net asset value rises over a period of time
    Dividend payout at periodic intervals depending on surplus funds

Who Is It Suitable For?

For an investor, income funds are ideal for planning for child's education, setting aside money towards down payment on a house, retirement planning, among other long-term goals.

Even investors with higher risk appetites who prefer to invest through equity funds / equities, can consider investing a portion of money in income funds for diversification.

Related Articles

Related Insurance Definitions:

Products Offered by HDFC Life:

Show Full Article
Hide Full Article

Investment Articles Investment Articles

HDFC Life Insurance Company Limited. CIN: L65110MH2000PLC128245, IRDAI Reg. No. 101.

Registered Office: Lodha Excelus, 13th Floor, Apollo Mills Compound, N.M. Joshi Marg, Mahalaxmi, Mumbai 400 011. Email: [email protected], Tel No: 1800-266-9777 (10 am to 7 pm). The name/letters “HDFC” in the name/logo of the company belongs to Housing Development Finance Corporation Limited (“HDFC Limited”) and is used by HDFC Life under an agreement entered into with HDFC Limited.

For more details on risk factors, associated terms and conditions and exclusions please read sales brochure carefully before concluding a sale.

  • IRDAI is not involved in activities like selling insurance policies, announcing bonus or investment of premiums. Public receiving such phone calls are requested to lodge a police complaint.