What Are Some Good Floating-Rate Funds?


Quick Answer

As of 2015, good floating-rate funds include PowerShares Senior Loan Portfolio, iShares Floating Rate Bond ETF, closed-end funds and SPDR Blackstone/GSO Senior Loan ETF, according to Investopedia. Floating-rate funds generally have a high income and interest protection due to the zero interest rate policy.

Continue Reading
Related Videos

Full Answer

As of 2015, PowerShares Senior Loan Portfolio, or BKLN, and iShares Floating Rate Bond ETF, or FLOT, have values of $5.7 billion and $3.2 billion, respectively, and they offer a wide range of floaters at low costs that generally provide better returns, as Investopedia reports. The yields of both BKLN and FLOT increase as the Fed hikes the interest rates. The yields of BKLN and FLOT as of 2015 are 4.08 percent and 0.49 percent.

Interested investors should invest in funds that can be actively managed, such as the SPDR Blackstone/GSO Senior Loan ETF, because they not only offer better returns, but are also more efficient, which makes them unlike other segments that offer loans at fixed interest rates, as Investopedia explains.

Investors should purchase closed-end funds, or CEFs, which provide for an initial public offering to raise a fixed amount of capital because they sell assets at a discount to their net asset value, or NAV, per share, according to Investopedia. Funds that offer discounts on their securities but still produce higher returns include Nuveen Senior Income Fund, Voya Prime Rate Trust Shares and Eaton Vance Senior Income Trust.

Learn more about Investing

Related Questions