December 01, 2011 at 09:40 AM EST
New ETF: Floating Rate Bond SPDR
The latest addition to the fast-growing ETF lineup is a fund from State Street that will offer exposure to investment grade debt that adjusts interest payouts based on prevailing market conditions. The SPDR Barclays Capital Investment Grade Floating Rate ETF (FLRN) is linked to an index that consists of investment grade debt with a floating interest rate, meaning that the component securities will make interest payments that are based on the value of a specified reference rate. The underlying index consists primarily of debt instruments that pays a variable coupon rate based on 3-month LIBOR, plus a fixed spread that can vary from bond to bond. Case For “Floaters” With interest rates continuing to hover near historical lows, investors have become increasingly focused on floating rate debt. That’s because floating rate debt generally exhibits very low sensitivity to interest rate movements, since the payout investors will receive will move in [...] Click here to read the original article on ETFdb.com. Related Posts: State Street Plans Floating Rate Bond ETF Using ETFs To Build A Complete Bond Portfolio iShares Launches Floating Bond ETF (FLOT) Inflation ETF Special: 25 ETF Ideas To Fight Rising Prices CBND vs. LQD: Better Corporate Bond ETF?
The latest addition to the fast-growing ETF lineup is a fund from State Street that will offer exposure to investment grade debt that adjusts interest payouts based on prevailing market conditions. The SPDR Barclays Capital Investment Grade Floating Rate ETF (FLRN) is linked to an index that consists of investment grade debt with a floating interest rate, meaning that the component securities will make interest payments that are based on the value of a specified reference rate. The underlying index consists primarily of debt instruments that pays a variable coupon rate based on 3-month LIBOR, plus a fixed spread that can vary from bond to bond. Case For “Floaters” With interest rates continuing to hover near historical lows, investors have become increasingly focused on floating rate debt. That’s because floating rate debt generally exhibits very low sensitivity to interest rate movements, since the payout investors will receive will move in [...]

Click here to read the original article on ETFdb.com.

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