High yield bonds and senior floating rate loans have performed quite well over the past four years.
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As of June 30, floating rate loans comprised over 93.1% of the portfolio.
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To answer these fears, there has been an explosion in funds that specialize in bank loans (aka floating rate loans), including BlackRock Senior Floating Rate (BFRCX), RS Floating Rate (RSFLX) and Neuberger Berman Floating Rate (NFIAX).
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The polite term for the asset class we have in mind is floating-rate loans.
Mr Brown will not find it much easier to wean Britain's borrowers off their fixation on floating-rate loans.
For individuals the good news is that there are mutual funds that make it easy to invest in diversified portfolios of floating-rate loans, mostly made by banks to corporations with less than investment-grade bond ratings.
Where floating-rate loans and stocks rode higher in March, fixed-income securities trended lower as stronger economic tides pushed up 10-year Treasury yields by 24 bps, to 2.21% on March 31, from 1.97% a month earlier, according to Bloomberg.com and the Federal Reserve.
Based on that, many companies have refinanced their floating rate debt into fixed rate loans.
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Investors who like the idea of floating-rate funds but not bank loans have a few other options.
Floating-rate funds are pools of bank loans made to companies, and the interest rates on those loans adjust as interest rates change.
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House Education Chairman John Kline's bill sets floating rates on new Stafford loans at the 10-year Treasury rate plus 2.5%, while also protecting borrowers by capping the rates at 8.5%.
The Neuberger Berman Global Floating Rate Income Fund is also London-listed, but its portfolio is heavily skewed towards U.S. loans, which account for more than 80% of the portfolio.
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