“Until interest rates rise, there’s really no point to a floating-rate Treasury fund,” Tim Strauts, an analyst at Morningstar, said in the article. “Floating-rate Treasurys make sense for the government, but for actual investors, there probably are better options.”
Investors have been attracted to the floating-rate strategy in response to rising rates. For instance, the PowerShares Senior Loan Portfolio (NYSEArca: BKLN), a floating-rate, high-yield, senior loan ETF, was one of the most popular ETFs this year, attracting $4.7 billion in assets year-to-date. [High-Yield Bank Loan ETFs: Credit Risk vs. Rate Risk]
Other floating rate bond ETFs include the iShares Floating Rate Bond ETF (NYSEArca: FLOT), SPDR Barclays Investment Grade Floating Rate (NYSEArca: FLRN) and Market Vectors Investment Grade Floating Rate (NYSEArca: FLTR). [BlackRock: Duration Customization]
For more information on new fund products, visit our new ETFs category.
Max Chen contributed to this article.