Floating-rate securities offer the unique benefit of generating income that keeps pace with changes in market interest rates, making them particularly beneficial when rates are rising. Floating-rate debt may include corporate, municipal and asset-backed securities, and adjustable-rate mortgages as well as trade finance and senior bank loans, both investment grade and non-investment-grade.
What are the potential benefits?
- Pegged to prevailing short-term rates and reset every 30-90 days
- Provide income potential that's competitive with longer-duration fixed- income options
- Loans are secured by company assets or financed goods
- Historically low correlation to other fixed-income investments
What does Federated offer in this category?