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A Smart Beta Bond ETF for a Rising Rate Environment 

April 6, 2018


"As fixed-income investors consider ways to hedge their portfolio against the negative effects of rising interest rates, consider a rules-based floating rate bond exchange traded fund to generate attractive yields without worrying about rate risks.

If you want to put your cash to work but are not ready to commit to long-term risks, fixed-income investors may consider a floating rate bond ETF, such as the VanEck Vectors Investment Grade Floating Rate (NYSEArca:) to act an alternative to traditional cash instruments. FLTR shows a 2.24% 30-day SEC yield and an effective duration of 0.10 years.

Ed Lopez, head of ETF product management at VanEck, argued that FLTR is not your typical floating rate bond ETF as it is constructed more like a smart beta strategy."

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