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iShares Floating Rate Bond ETF: Small Yield, But Growing

Published Sun, 22 Jul 2018 22:19:48 -0400 on Seeking Alpha

Main Thesis The purpose of this article is to discuss why I believe the iShares Floating Rate Bond ETF (FLOT) is an attractive investment option at its current market price. The fund holds debt with "floating" interest rates, which means the rates will re-set at given intervals. This debt is preferable in the rising rate environment we are currently seeing, and should expect to see heading into next year. Furthermore, the fund is made up of mostly investment grade corporate debt, which provides stability that investors may be looking for. Finally, FLOT has seen aggressive increases to its distribution rate, which has pushed the fund's yield up to a more attractive level, and gives me confidence that the yield should continue higher still going forward.
Background First, a little about FLOT. The fund "seeks to track the investment results of an index composed of U.S. dollar-denominated, investment-grade floating rate bonds with remaining maturities between one month and five years." It offers investors exposure to U.S. floating rate bonds, whose interest payments adjust to reflect changes in interest rates. FLOT is currently trading at $50.97/share and pays a monthly distribution. I reviewed FLOT back in March, and recommended the fund because I believed the fund's exposure to floating rate instruments would benefit it going forward. Since that time, investors would have seen a total return around .81%, and also seen the yield increase from its previous... Read more

Stock name Last trade   P/E Earnings/Share Dividend/Share Dividend yield
FIRST MAJESTIC SILVER 9.92   0.0 -1.03 0.00 0.00


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