Floating Rate ETF Triples In Size On Rising Rate Fears
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FLOT vs. ETF Alternatives
"The iShares Floating Rate Note Fund seeks investment results that correspond generally to the price and yield performance, before fees and expenses, of the Barclays Capital US Floating Rate Note < 5 Years Index. The coupon rates for floating rate notes are an aggregate of the ""Reference Rate"" (typically 1 month, 3 month or 6 month LIBOR)1 plus a fixed coupon spread which is based on the market's perception of the issuer's credit risk at the time of issuance. The coupons are fixed until predetermined reset dates when they will be adjusted in accordance with changes in the Reference Rate. "
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Country: United States
Tuesday, Feb 252:14 AM
Tuesday, Feb 252:14 AM| 2 Comments
- Cisco Systems (CSCO) has raised $8B in the largest corporate-bond sale so far this year and the biggest for investment-grade notes since Verizon sold $49B worth of debt in September.
- Cisco plans to use the money to finance stock buybacks and dividends, and to repay $3.75B of notes that mature this year.
- Cisco sold debt in seven parts with fixed- and floating-rate securities, with yields ranging from 1.1% to 3.625%.
- Moody's rates Cisco at A1 and S&P at AA-.
- While Cisco "hasn't had smooth sailing from the equity perspective," says money manager Thomas Chow, "there's overwhelming demand...for well-known issuers with strong fundamentals." Cisco "has a large cash balance and a dominant position in product lines that aren’t going to disappear overnight," Chow adds. (PR)
- ETFs: FLOT, BSCE, BSCF, FLTR, FLRN, BSCH, BSCG, BSCI, IBCE, IBCB, BSCK, IBCC, BSCJ, BSCM, IBDC, IBDA, IBDD, IBDB, IBCD, BSCL
Tuesday, Nov 122013, 9:31 AM
Tuesday, Nov 122013, 9:31 AM| Comment!
- Wasting little time after the scheduling of Treasury's first auction of floating-rate debt, State Street (STT) puts into registration the SPDR Floating Rate Treasury ETF (FLTY). The prospectus is a preliminary one and no fees have yet been disclosed.
- Treasury last week set a date of January 29 for its first auction of floating-rate paper.
- Needless to say, FLTY is as risk-free as it gets from a credit perspective. Moving further out the spectrum, the iShares Floating Rate Bond ETF (FLOT) and the SPDR Investment Grade Floating Rate Bond ETF (FLRN) both own investment grade corporate paper.
Tuesday, Apr 162013, 11:21 AMHigh yield funds (HYG, JNK) may be out of favor, but senior bank loan ETFs are getting the business, having grown AUM by $18B so far this year, more than the $11.5B for all of 2012. Senior bank loans (BKLN, SNLN) are of similar credit quality to junk bonds, but have the attraction of being floating rate and higher up in the corporate structure. Investment grade funds are available too: FLOT, FLRN, FLTR. |Tuesday, Apr 162013, 11:21 AM| Comment!
Monday, Mar 182013, 4:57 AMRon Rowland offers additional highlights on the recently expanded lineup of commission-free ETFs over at Fidelity including the following caveat: Funds not held for 30 days by retail investors or 60 days by RIAs using Fidelity as a custodian will be subject to a $7.95 per-trade commission. Some RIAs have complained that the longer holding period directed at them is unfair. Rowland spells out the full list of affected ETFs here. |Monday, Mar 182013, 4:57 AM| Comment!
Friday, Jun 222012, 10:25 AMBlackstone (BX) unit GSO Capital files to launch the first actively-managed ETF dedicated to leveraged loans. So-called leveraged loans rank higher up in the corporate structure than bonds and tend to be floating-rate - offering some protection against rising interest rates, though that may never come. |Friday, Jun 222012, 10:25 AM| Comment!
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