What is a key benefit of investing in fixed-income mutual funds?

Investing in fixed-income mutual funds offers the advantage of requiring a lower initial investment compared to purchasing individual bonds. This accessibility allows a broader range of investors to participate in fixed-income markets without needing significant capital. By pooling money from multiple investors, fixed-income mutual funds can buy a diversified portfolio of bonds, which would typically be challenging for an individual investor to assemble on their own within a modest budget.

Additionally, this feature democratizes access to fixed-income investments, enabling investors who might not have extensive financial resources to benefit from the stability and income generation that bonds can provide. In contrast, the other options do not accurately reflect the benefits of investing in fixed-income mutual funds. For example, while fixed-income investments can provide income stability, they do not usually offer higher potential returns than stocks, and returns are not guaranteed. Moreover, investors in mutual funds do not have direct control over the selection of individual bonds, as this is managed by professionals within the fund.