Expert: Doug Ingram - 1/6/2010

Question
Hello Sir.

I want to know about the difference between Equity, Fixed Income? Is Bond a fixed income? Is Mutual Funds a equity?

Thank you

Answer
You are correct.  Equity is shares of ownership - or stock.  

Bonds are money loaned to an entity (debt) and provide coupon payments.  (Even though the payments can be floating rate, they are still called fixed income.)

Mutual funds are shares of a fund, so they are equity in that fund.
Even a fixed income fund that holds all bonds is still not a bond.
Although they are not fixed income and not shares in a company, they are closer to equities.