Fixed income and variable income: the difference on one page

In fixed income, the rule of return is known when you invest: a set rate, a reference index or a combination of both. In variable income, the return depends on the market and can be positive or negative.

Fixed income

• Examples: government bonds, bank deposit certificates and corporate bonds.
• You lend money to a government, bank or company and receive interest for it.
• The main risk is the issuer not paying, plus price changes if you sell before maturity.

Variable income

• Examples: stocks, real estate funds and index funds.
• You become a shareholder or unit holder, and the value follows the market.
• The price swings in the short term, and there is no guaranteed return.