Floating Rate Notes Make A Lot Of Sense These Days (FLOT)

Mackenzie active ETFs give investors the innovation and expertise of our portfolio Responsible investing · Founded in  · Innovation & expertiseTypes: Equity, Fixed income, Symmetry portfolios, Allocation.

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Mackenzie active ETFs give investors the innovation and expertise of our portfolio Responsible investing · Founded in  · Innovation & expertiseTypes: Equity, Fixed income, Symmetry portfolios, Allocation.

Other conditions and fees may apply. BlackRock is not affiliated with Fidelity or any of their affiliates. All other marks are the property of their respective owners. This and other information can be found in the Funds' prospectuses or, if available, the summary prospectuses which may be obtained by visiting the iShares Fund and BlackRock Fund prospectus pages. Fixed income risks include interest-rate and credit risk. Typically, when interest rates rise, there is a corresponding decline in bond values.

Credit risk refers to the possibility that the bond issuer will not be able to make principal and interest payments. Securities with floating or variable interest rates may decline in value if their coupon rates do not keep pace with comparable market interest rates.

Diversification and asset allocation may not protect against market risk or loss of principal. Transactions in shares of ETFs will result in brokerage commissions and will generate tax consequences. All regulated investment companies are obliged to distribute portfolio gains to shareholders.

Brokerage commissions will reduce returns. Eastern time when NAV is normally determined for most ETFs , and do not represent the returns you would receive if you traded shares at other times. Index returns are for illustrative purposes only.

Index performance returns do not reflect any management fees, transaction costs or expenses. Indexes are unmanaged and one cannot invest directly in an index. Past performance does not guarantee future results. After-tax returns are calculated using the historical highest individual federal marginal income tax rates and do not reflect the impact of state and local taxes.

Actual after-tax returns depend on the investor's tax situation and may differ from those shown. The after-tax returns shown are not relevant to investors who hold their fund shares through tax-deferred arrangements such as k plans or individual retirement accounts.

Certain sectors and markets perform exceptionally well based on current market conditions and iShares Funds can benefit from that performance. Achieving such exceptional returns involves the risk of volatility and investors should not expect that such results will be repeated. Options involve risk and are not suitable for all investors. Prior to buying or selling an option, a person must receive a copy of "Characteristics and Risks of Standardized Options.

The document contains information on options issued by The Options Clearing Corporation. The document discusses exchange traded options issued by The Options Clearing Corporation and is intended for educational purposes. No statement in the document should be construed as a recommendation to buy or sell a security or to provide investment advice. If you need further information, please feel free to call the Options Industry Council Helpline.

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None of these companies make any representation regarding the advisability of investing in the Funds. Our Company and Sites. United States Select location. The performance quoted represents past performance and does not guarantee future results. Investment return and principal value of an investment will fluctuate so that an investor's shares, when sold or redeemed, may be worth more or less than the original cost. Current performance may be lower or higher than the performance quoted.

Fund expenses, including management fees and other expenses were deducted. Current performance may be lower or higher than the performance quoted, and numbers may reflect small variances due to rounding. Standardized performance and performance data current to the most recent month end may be found in the Performance section. Inception Date Jun 14, Asset Class Fixed Income.

Shares Outstanding as of Jan 04, ,, Number of Holdings The number of holdings in the fund excluding cash positions and derivatives such as futures and currency forwards. Closing Price as of Jan 04, Volume The average number of shares traded in a security across all U.

Daily Volume The number of shares traded in a security across all U. A beta less than 1 indicates the security tends to be less volatile than the market, while a beta greater than 1 indicates the security is more volatile than the market. Standard Deviation 3y Standard deviation measures how dispersed returns are around the average. A higher standard deviation indicates that returns are spread out over a larger range of values and thus, more volatile.

For illustrative purposes only. This illustration does not represent the actual performance of any iShares Fund. Investors might be familiar with bank loans or leveraged loans, which are high-yield loans that also have coupons that reset with 3-month LIBOR.

The popularity of these instruments has grown over the past decade, as investors sought higher yields when rates were exceedingly low. While FRNs and bank loans both offer floating interest rates, they have key differences in terms of credit quality and liquidity. As the table shows, their respective risk profiles are quite different. The shorter maturity, higher credit quality and greater liquidity of FRNs mean they may carry considerably lower risk than bank loans.

Investors can use FRNs to help manage risk and return in a rising rate environment, by making adjustments to their portfolios:. Investors who use cash equivalents in an effort to protect portfolios from rising rates run the risk that their income might not keep pace with inflation. By comparison, core bond indexes like the Bloomberg Barclays U. Aggregate Index had a duration of 5. Durations are from Bloomberg. FRNs offer access to corporate debt, which may generate more income than a similar maturity U.

Exchange traded funds, such as iShares Floating Rate Bond ETF FLOT , are a convenient, low-cost way to add diversified exposure to a bond portfolio, while managing interest rate risk in a rising rate environment.

Year-to-date, FLOT has gained 0. This article is brought to you courtesy of BlackRock.