2024-07-28 04:13:01 ET
Summary
- Floating rate funds like JFR offer decent distribution yields and should continue to do so despite expected rate cuts, as rates aren't expected to go back to zero.
- JFR remains relatively attractive compared to peers in the closed-end fund senior loan space, though bargain valuations are tougher to come by in this space.
- With a high amount of leverage, there is relatively more risk to be cognizant of here, but that can come with greater reward as well.
Written by Nick Ackerman, co-produced by Stanford Chemist
Floating rate funds have been enjoying better cash flows while the Fed has ramped up rates aggressively. With rates set to cut, they might not be as attractive, but unless rates go back down to zero—which isn't expected—then they can still produce some decent distribution yields for investors. In the closed-end fund space, a fund like Nuveen Floating Rate Income Fund ( JFR ) offers investors exposure to this space while it also trades at a slight discount. Even though this fund's discount has narrowed quite dramatically, it does remain one of the better-valued out there....
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For further details see:
JFR: Floating Rate Exposure Can Still Have A Place In A Portfolio