TFLO - TFLO: As Descriptive As It Gets For Floating Rate Treasuries

2024-05-13 04:02:08 ET

Summary

• iShares Treasury Floating Rate Bond ETF offers investors a way to preserve capital and maintain a steady income stream during rising interest rate cycles.
• TFLO primarily invests in U.S. Treasury bonds with variable interest rates, making its movement unaffected by rate increases.
• The Fund's exclusive focus on U.S. Treasury securities limits diversification opportunities, but offers protection in a rising rate environment.

Unlike traditional fixed-rate bonds, whose prices typically decline as interest rates rise, floating rate bonds adjust their interest payments in line with changes in interest rates. This feature made the iShares Treasury Floating Rate Bond ETF ( TFLO ) a go-to for investors looking to preserve capital and maintain a steady income stream during the last three years, as the Fed embarked on the fastest rising rate cycle in history. And while I suspect a fund like this can continue to do well, the appeal certainly isn't what it once was....

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