What are growth and income funds?

Definition and Example of Growth and Income Funds

Growth and income funds are mutual funds and exchange-traded funds (ETFs) that invest in stocks or other securities that combine long-term growth and short-term income. These funds provide balance to a portfolio, allowing the investor to earn money in the present and the future.

How do Growth and Income Funds work?

Growth and income funds can consist of a variety of securities. It is important to note that the income objective of a growth and income fund does not exclusively dictate the contents of the fund to generate income only. The income objective of a growth and income fund can also be achieved through fixed-income instruments. These instruments can include bonds, for example.

What does this mean for individual investors?

For many investors – whether they are beginners or advanced – a good growth and income approach may be investing in one of the best S&P 500 index funds. This will provide exposure to both growth and value stocks. You can also choose to invest in a bond fund, which will complement and add to the income aspect of the growth and income objective. At the same time, it can help reduce the overall market risk to the portfolio.

Frequently Asked Questions

How risky are growth and income funds?
Growth and income represent two divergent strategies in terms of investment risk. Growth is usually considered one of the riskier investment options, while investing in fixed-income securities is among the safest. Combining these two investment categories in one fund can be seen as a middle ground between these two opposing ends in terms of risk.

Which countries receive foreign tax payments from an international growth and income fund?
You can check a fund’s national exposure by reviewing its contents. The fund’s website should allow you to obtain this information easily. These contents can be broken down by region, giving you a list of countries and their respective percentages related to the fund’s exposure. You may not be able to pinpoint the specific earnings of specific countries, but you can get a general idea of which countries will receive taxes from your earnings.

Source: https://www.thebalancemoney.com/what-is-growth-and-income-2466767