Joseph Lynch and Stephen Casey, managers of the Neuberger Berman Global Floating Rate Income fund, analyse the benefits of this less well-known member of the bond universe.
Bond yields remain at record lows. While this environment of sustained low rates has, on the one hand, frustrated those seeking yield from their fixed income investments, it has also engendered complacency regarding the potential impact of rising rates on many investors’ portfolios. One less well-known investment type — floating rate loans (also known as bank loans) — potentially offer a solution to the compound problem of low yields and interest rate risk. Floating rate loans offer potentially attractive current yields as well as a hedge against rising rates. Floating rate loans are...
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