Alternatively, floating rate securities automatically adjust at periodic intervals in response to changes in the interest rates. The PowerShares Senior Loan Portfolio (NYSEArca: BKLN), a floating-rate, high-yield, senior loan ETF, resets its floating component every 18.2 days.
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). All of these ETFs, though, track corporate sectors, mainly financials and industrials.
The recently launched WisdomTree Bloomberg Floating Rate Treasury Fund (NYSEArca: USFR) and the iShares Treasury Floating Rate ETF (NYSEArca: TFLO) both track U.S. Treasury floating rate bonds. [Two Floating Rate ETFs Launch]
Additionally, the more aggressive trader can actively hedge against rising rates with inverse long-term Treasury bond ETF options. For instance, the ProShares UltraShort 20+ Year Treasury ETF (NYSEArca: TBT) seeks to provide twice, or 200%, the inverse daily performance of Treasuries with maturities greater than 20 years, and Direxion Daily 20+ Year Treasury Bear 3x Shares ETF (NYSEArca: TMV) tries to reflect the daily 300% inverse performance of the NYSE 20 Year Plus Treasury Bond Index, which holds long-term 20 year and greater maturity range of U.S. Treasuries. The inverse ETFs will benefit from rising rates and falling Treasury bond prices.
For more information on the fixed-income market, visit our bond ETFs category.
Max Chen contributed to this article.