With front-end rates anchored at record low levels, yield starved fixed income investors are searching for ways to earn incremental income. A few options include: extending duration by moving out the yield curve, going down in credit quality, or introducing alternative (less liquid) vehicles such as private credit. Institutional investors who favor capital preservation, liquidity and higher quality parts of the market may be surprised to learn of another alternative – investment grade floaters. In this paper, we’ll explore floating-rate securities in greater detail and highlight some of the associated benefits in a rising rate environment.
