Primer on floating-rate notes
Investors have been considering floating rate notes, as well as floating rate funds, as part of their portfolio strategies, in light of the recent rise in interest rates and the increasing uncertainty around the direction of rates.
While not a perfect solution, in rising and volatile rate environments, floating-rate notes have attractive elements as compared to their fixed-rate peers. We explain the key components of floating-rate notes, and similar securities, highlighting the benefits and limitations.
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