Related: A Compelling Kind of Junk Bond ETF
Regarding credit risk, that is not a significant issue with FLOT as essentially all of the fund’s holdings are rated AAA, AA, A and BBB. With interest rates expected to continue moving higher, FLOT’s allure increases.
“It is likely, in the short run, the Fed will continue to raise interest rates. Accordingly, if you are a short-term bond investor, you may want to consider part of your bond investments in floating-rate bonds,” according to the Tribune.
For more information on the fixed-income space, visit our bond ETFs category.