Other Income-Generating Products

Fixed income generally refers to investments that promise to pay interest or a return on your initial investment. However, other investment products may also provide income.

Types of other income-generating products

Dividend-yielding stocks

Some companies pay out a dividend, or a portion of their profits, to stockholders. Dividends are not fixed and can be increased, decreased, or eliminated without much notice. Similarly, the dividend yield can vary because of increases or decreases in the share price.

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Preferred stocks

Preferred stock is distinct from common stock and is not offered by all companies. Preferred stocks offer dividends that aren’t guaranteed but must be paid before dividends are paid on common stock. As with bonds, preferred stocks have various terms and features that vary from one preferred to another and can impact the expected future income.

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Fixed-rate capital securities (FRCS)

These hybrid securities combine the features of corporate bonds and preferred stock. FRCS carry the creditworthiness of the issuer and generally have a stated maturity. A commonly seen risk to their income-generating promises is their ability to defer or suspend interest payments in the event the issuer experiences financial difficulties

Learn more about fixed-rate capital securities.
Equity income funds

These funds invest primarily in shares of companies that pay a dividend and can offer an attractive yield, while also providing the potential for conservative capital appreciation. Companies that pay dividends tend to be higher quality, mature businesses, with stable cash flows.

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Asset allocation funds

These funds offer diversification across multiple asset classes, including domestic and international stocks across varying styles and market capitalization ranges, investment grade and high yield fixed income, and short-term investments. Fidelity also offers seven Fidelity Asset Manager® funds, with equity exposure ranging from conservative (20%) to aggressive growth (85%).

Income replacement funds

Fidelity Income Replacement FundsSM combine the power of professional asset management with professionally managed withdrawals to help turn part of your savings into regular monthly payments.

Defined maturity funds (DMFs)

These funds are an innovative way to invest in municipal bonds.

Like Fidelity's other municipal bond funds, DMFs offer professional management, diversification, and seek to provide federally tax-exempt income. Unlike traditional bond funds, a DMF's price sensitivity to changes in interest rates declines gradually over time, approaching zero near the fund’s target end-date.

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Strategic funds

Fidelity Strategic Funds are multi-asset-class strategies that seek to address key income needs—bond income from global sources, non-bond income, and real return—by investing in a diversified mix of fixed income and/or equity investments chosen for their historical combined performance.

Closed-end funds

These funds invest in a variety of securities, much as you would with conventional open-end mutual funds. However, unlike open-end mutual funds, CEFs trade and are priced intraday—like stocks on an exchange—at prices determined by buyers and sellers.

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Next steps

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