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Over 64% of FLOT’s holdings are rated A or BBB. The fund has an effective duration of just 0.15 years, but the trade-off is with lower interest rate risk comes a lower yield. FLOT’s 30-day SEC yield is just 2.50%.
“The fund’s five-year annualized return through May 2018 of 1.1% was better than 80% of its peers. This outperformance principally stems from its relatively aggressive credit profile. The fund, however, is likely to lag its peers during market downturns when credit spreads widen,” according to Morningstar.
Morningstar upgraded FLOT to Bronze from Neutral.
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