As a result of the safe and conservative nature of floating rate bonds, investors should not expect high yields. Nevertheless, Treasury money market funds are so starved for yield that anything with an extra basis point or two and the quality and liquidity of a Treasury security will provide an attractive alternative.

Additionally, Investors looking for a high-yield, equity income position may consider Business Development Company, or BDC, exposure to complement a traditional income-oriented portfolio. BDCs are comprised of companies that fund small- to mid-sized private companies, which are usually rated below investment grade or not rated at all. Furthermore, these companies should also do relatively well in the kind of environment ahead where many expect an increase in interest rates since most BDC loans set to float with interest rate benchmarks.

For example, the VanEck Vectors BDC Income ETF (NYSEArca: BIZD) offers a pure play to BDCs. According to VanEck, 80% of the portfolio is allocated to floating rate loans, there is limited rate risk. The ETF also comes with an attractive 9.19% 30-day SEC yield.

For more information on the fixed-income markets, visit our bond ETFs category.