Bank loan or floating rates bonds are unique among bond types in that the rate is not fixed, but is free to move in relation to an underlying base rate such as the LIBOR (London Interbank Offered Rate). As with any investment there are risks and bank loans are no exception. With the prospect of rising interest rates looming over our economy, everything from bonds to houses will be impacted so I’m constantly looking for ways to benefit from that environment.
Virtus Investment Partners published a white paper in May of this year discussing floating rate funds and their characteristics.
Read it here: Virtus White Paper-BreakFromTradition