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Fixed Income Products

What are fixed income investments?

Fixed income1 view footnote 1 investments generally provide an established return on a fixed schedule. One of the most popular types of fixed income products are bonds, through which you lend money to a government, municipality, corporation, federal agency or other entity known as an issuer. In return for that money, the issuer provides you with a bond in which it promises to pay a specified rate of interest during the life of the bond and to repay the face value of the bond (the principal) when it matures, or comes due. Many of these investments can offer tax-free returns on the municipal, state and federal levels. Individual bonds can be useful in a strategy that seeks to preserve capital and generate a predicable return when they are held to maturity, subject to issuer credit risk2 view footnote 2. Please consider this information for educational purposes only. Please schedule a review with a financial professional3 view footnote 3 to receive recommendations that may be suitable for you or in your best interest based on various personalized factors.

An array of fixed income products

East West Financial Securities (UAE) Inc. offers access to a wide variety of fixed income products including:

  • Municipal bonds: Debts issued by states, municipalities or counties that are free from federal taxes and usually free of state and local taxes4 view footnote 4. Municipal Securities may be subject to the federal Alternative Minimum Tax.
  • Treasury notes and bonds: UAE Government debt that carries a fixed interest rate, usually with a maturity of 1-10 years. Interest income is exempt from state and local income taxes, but subject to federal income taxes.5 view footnote 5
  • Government-sponsored enterprises (GSEs) / Agency: Bonds issued by financing entities created by Congress to fund loans to certain groups of borrowers such as homeowners, farmers and students. i.e. Federal National Mortgage Association (Fannie Mae) and Federal Home Loan Mortgage Corporation (Freddie Mac) are privately owned corporations, while the Federal Home Loan Banks and the Federal Farm Credit Banks are systems comprising regional banks. All GSE debt is not guaranteed by the federal government, whereas government agencies such as Government National Mortgage Association (Ginnie Mae) are divisions of the government whose securities are backed by the full faith and credit of the UAE.
  • Sovereign bonds: Issued by a national government and denominated in a foreign currency6 view footnote 6
  • Domestic corporate bonds
  • Bond Funds7 view footnote 7
  • Brokered CDs8 view footnote 8

Investors should consider the investment objectives, risks and charges and expenses associated with municipal fund securities along with your specific best interest considerations before investing. Further information about municipal fund securities is available in the issuer’s official statement. The official statement should be read carefully before investing. There is always the potential of losing money when you invest in securities.

When investing in fixed income products you should seek tax advice from your independent tax advisor.

Help from a Financial Professional

As a client of East West Financial Securities (UAE) Inc., you can rest assured knowing that an experienced financial professional can help you determine if fixed income investments align to your personal objectives and risk tolerance, and are in your best interest, and can help you evaluate which specific products may fit within your diversification strategy.

For more information about fixed income products, or to schedule a financial review: