An income fund is a mutual fund

Mutual fund

A mutual fund is a professionally managed type of collective investment scheme that pools money from many investors to buy stocks, bonds, short-term money market instruments, and/or other securities.- Overview :...

 whose goal is to provide an income from investments.

Income funds are often assumed to be synonymous with bond fund

Bond fund

A bond fund is a collective investment scheme that invests in bonds and other debt securities. Bond funds typically pay periodic dividends that include interest payments on the fund's underlying securities plus periodic realized capital appreciation. Bond funds typically pay higher dividends than...

s, however income funds may hold stock

Stock

The capital stock of a business entity represents the original capital paid into or invested in the business by its founders. It serves as a security for the creditors of a business since it cannot be withdrawn to the detriment of the creditors...

s instead (typically those with a good history of paying dividend

Dividend

Dividends are payments made by a corporation to its shareholder members. It is the portion of corporate profits paid out to stockholders. When a corporation earns a profit or surplus, that money can be put to two uses: it can either be re-invested in the business , or it can be distributed to...

s), more accurately called equity income funds, or even some combination.

The point in any case is that the investor is more interested in income than capital gains, perhaps with the intention the fund will never be sold.

Income Funds in Canada

In Canada there are a large number of tax efficient entities - public royalty trust and private income trusts - dedicated to generating income, particularly from the energy sector.

Canadian Publicly-Traded Royalty Trusts

• Baytex Energy Trust  (Canada: oil and natural gas)
• BP Prudhoe Bay Royalty Trust
  BP Prudhoe Bay Royalty Trust
  The BP Prudhoe Bay Royalty Trust is a United States oil and natural gas royalty trust based in New York, New York. With a market capitalization of US$ 1.6 billion in early 2008, and an average trading volume of 121,000 shares, BP Prudhoe Bay Royalty Trust is the largest conventional oil and gas...
  
    (US: Prudhoe Bay oil field, Alaska)
• Canadian Oil Sands Trust
  Canadian Oil Sands Trust
  Canadian Oil Sands Limited is a Canadian company that generates income from its oil sands investment in the Syncrude Joint Venture. Syncrude operates an oil sands facility and produces crude oil through the mining of oil sands from ore deposits in the Athabasca region of northern Alberta,...
  
    (Canada: oil sands)
• Cross Timbers Royalty Trust  (US: Texas, Oklahoma, New Mexico: oil and gas)
• Daylight Resources Trust Ltd.  (Canada: oil and natural gas)
• Dominion Resources Black Warrior Trust  (US: Alabama, mainly natural gas)
• Enerplus Resources Fund
  Enerplus Resources Fund
  Enerplus Corporation was established in 1986 and is one of Canada’s oldest and largest independent oil and gas producers offering investors a high yield combined with moderate, profitable growth potential from resource plays across Western Canada and the United States.Enerplus Corporation trades...
  
    (Canada: oil and natural gas; properties both in Canada and the U.S.)
• Harvest Energy Trust
  Harvest Energy Trust
  Harvest Operations Corp. is a Canadian oil and natural gas company based in Calgary, Alberta. Unlike many oil and gas trusts, which consist only of production fields, Harvest had both "upstream" and "downstream" components...
  
    (Canada: 70% oil, 30% natural gas, and also owns a refinery)
• Hugoton Royalty Trust  (US: Kansas, Oklahoma, Wyoming; natural gas)
• LL&E Royalty Trust  (US: Florida, Alabama, and in the Gulf of Mexico; oil and gas; will liquidate in 2008)
• Marine Petroleum Trust  (US: Gulf of Mexico; oil and gas)
• Mesabi Trust (US: Minnesota, iron ore)
• Mesa Royalty Trust  (US: oil)
• MV Oil Trust  (US: oil)
• North European Oil Royalty Trust  (Incorporated in the US, but the oil-producing properties are in Germany)
• Permian Basin Royalty Trust
  Permian Basin Royalty Trust
  The Permian Basin Royalty Trust is a United States oil and natural gas royalty trust based in Dallas, Texas. With a market capitalization of US $790,000,000, and an average daily trading volume of about 186,000 shares at the end of 2007, it is one of the largest royalty trusts in the United States...
  
    (US: Texas, oil and gas)
• Penn West Energy Trust
  Penn West Energy Trust
  Penn West Exploration is a Canadian oil and natural gas company based in Calgary, Alberta, one of the S&P/TSX 60, the sixty largest companies on the Toronto Stock Exchange. Until the end of 2010 it was one of the companies known as "Canroys"...
  
    (Canada: oil and gas)
• Pengrowth Energy Trust
  Pengrowth Energy Trust
  Pengrowth Energy Corporation is a Canadian oil and natural gas company based in Calgary, Alberta. Established in 1988 by Calgary entrepreneur James S Kinnear, it was one of the largest of the Canadian royalty trusts , with a market capitalization of US$ 4.12 billion at the end of 2007...
  
    (Canada: oil and gas, including oil sands)
• Precision Drilling Trust  (Canada: drilling contractor to the oil and gas industry)
• Provident Energy Trust  (Canada: oil and gas; properties both in Canada and the US)
• Sabine Royalty Trust  (US: Florida, Louisiana, Mississippi, New Mexico, Oklahoma, Texas; oil and gas)
• Santa Fe Energy Trust  (US: oil and gas in 12 states; trust to be liquidated in 2008)
• San Juan Basin Royalty Trust  (US: New Mexico, mainly natural gas)
• TEL Offshore Trust  (US: Gulf of Mexico offshore of Louisiana; oil and gas)
• Tidelands Royalty Trust B  (US: Gulf of Mexico, oil and gas)
• Torch Energy Trust  (US: Louisiana, Alabama, Texas; mainly natural gas)
• Williams Coal Seam Gas Royalty Trust (US: New Mexico and Colorado, natural gas)

Canadian Private Energy Income Trusts

• Petrocapita Income Trust (Canada: western Canada, oil and gas)