What is a Fixed Income Product?
Fixed Income Securities Market is one of the oldest and largest of all the securities markets in the world. It has been the forerunner in the emergence of the financial markets as the engine of economic growth across the globe. Fixed Income Securities Market is also known as the Debt Market or Bond Market.
Debt Market has a very prominent role to play in the efficient functioning of the world financial system and in catalyzing the economic growth of nations across the globe.
In many countries, debt market (both sovereign and corporate) is larger than equity markets. In fact, in matured economies, debt market is three to four times the size of the equity market. Investment in equity being riskier, certain class of investors choose to invest in debt, based on their risk appetite and liquidity requirements.
In fact, most investors like to diversify their investments into equity, debt and other asset classes . In this way they attempt to acheive optimal combination of return, liquidity and safety.
A vibrant debt market enables investors to reshuffle their portfolio depending upon the expected changes. Debt market, in particular, provides financial resources for the development of infrastructure. Hence, a well functioning debt market is important for all the market participants.