What is the purpose of a U.S. Treasury income fund?

A U.S. Treasury income fund primarily aims to generate income while preserving capital by investing in U.S. Treasury securities, which are considered low-risk investments. These funds typically invest in bills, notes, and bonds issued by the U.S. government, providing a reliable source of fixed income through regular interest payments. The underlying securities are backed by the full faith and credit of the U.S. government, making them one of the safest investments available.

This focus on income generation aligns with the typical objectives of investors seeking steady returns while minimizing risk, making such funds particularly appealing to conservative investors, such as those nearing retirement or looking for safer investment alternatives. Preservation of capital is also a significant consideration, as U.S. Treasury securities are designed to return principal at maturity, further ensuring that the investment maintains its value over time.