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When companies, governments or supranational organisations need to raise cash, they can issue specific types of debt instruments such as bonds, which in their simplest forms operate like a loan. In return for these "loans" organisations have to pay a form of interest to their lenders (investors). Generally, the organisations considered to be the least likely to pay the debt back have to pay the highest levels of interest. Fixed income funds invest in these debt instruments and may also use the differences in the rates of exchange of currencies or other money market instruments to add value to their investment portfolios.
Money Market Funds
Money market funds are a place for investors to keep cash for the short term. These vehicles invest in various money market instruments. While they normally offer a higher return than a bank or building society account, the income received from a money market fund is not guaranteed and can vary.
The Franklin Templeton Fixed Income Group has over 100 fixed income investment professionals worldwide. With significant resources in all key fixed income sectors, the Group is well-placed to find the strongest securities with investment potential over the long-term.