Eaton Vance: Why now is the time to buy a floating rate fund

Floating rate loans became popular with investors as expectations of rate rises mounted, but inflows into these products have subsided as rate increases began to seem less imminent.

However, the BoE and the Fed will most likely begin increasing the base rate next year, and investors must be prepared for this move. John Redding, vice president and portfolio manager at Eaton Vance Investment Managers, presented the group’s floating-rate loan strategy at Investment Week’s recent Funds to Watch event. Why are floating rate notes a good choice for investors at the moment? Starting with the fundamentals, the US is in pretty good shape, with consistent growth of 2%-3%. For companies, this has translated to mid to high single digit earnings growth, and has led to ver...