More interest rate hikes to come? Savers move to fixed income funds like bonds

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UAE
  • Date: 13-May-2022
  • Source: Gulf News
  • Sector: Economy
  • Country: UAE
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More interest rate hikes to come? Savers move to fixed income funds like bonds

Dubai: With interest rates rising worldwide, and with more to come, experts recommend an investment approach that is focused on preservation of income, which simply involves setting aside your hard-earned money in fixed income assets like bonds. Furthermore, the time to do so can’t get better than now with the UAE government having launched its first government bond last week. What are fixed income assets? The term ‘fixed income’ refers to the interest payments that an investor receives and it generally includes different types of bonds or other debt assets that gives the owner the right to receive a stated, fixed sum of money on a specified date. So while the term ‘fixed income’ refers to the interest payments that an investor receives, which are based on the creditworthiness of the borrower and current interest rates, fixed income securities are often recognised as bonds that pay a higher interest (coupon). Moreover, with central banks hiking interest rates worldwide, here’s why your savings set aside in fixed income assets like bonds stand to benefit. This is because interest rates share an inverse relationship with bonds, so when rates rise, bonds tend to fall and vice versa. A bond is simply a

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