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.
Credit risk is minimal with FLRN as over 69% of the fund’s holdings are rated AA or A. Over 19% carry a Baa rating.
FLRN charges 0.15% per year, or $15 on a $10,000 investment.
For more on the bond market, visit our Fixed Income Channel.