These funds typically invest in bonds issued by sovereign governments and government agencies authorized to issue debt, such as Fannie Mae and Freddie Mac, and international agencies, such as the World Bank and International Monetary Fund.

These funds typically invest in bonds, preferred stocks, and other types of fixed-income instruments representing debt issued by private corporations. Corporate bonds tend to be more risky than bonds issued by governments and carry various credit risks depending on the individual issuer. As a result, however, they may offer potentially higher income opportunities

These represent participation in loans to private corporations underwritten by commercial banks, including first lien, second lien, and collateralized loan obligations. Bank loans tend to be more risky than corporate bonds but, as a result, can potentially offer higher interest rates.

Municipal bonds are issued by state and local governments in the U.S. in addition to other public authorities, such as school districts. Generally speaking, interest on municipal bonds is exempt from federal income taxes. In some states, interest on bonds issued by that state and the municipalities within it are also exempt from that state’s income taxes.

These funds typically invest in money market instruments and forward currency contracts denominated in the currencies of foreign countries. In addition to carrying credit risk, these funds carry currency fluctuation risk.

These funds typically invest in a variety of fixed-income instruments, including a mix of government and corporate bonds. This provides investors with an additional level of diversification across both credit risk and price.

Asset-backed securities are collateralized by loans that provide an income stream comprised of both principal and interest on the securities. Loans backing these securities include residential and commercial mortgages, automobile loans, credit cards, and other types of financial assets.