Who Invests in Floaters? 

Investors should consider their need for steady income when investing in floating rate notes or floaters because a decline in the benchmark used, will result in a lower interest payment.

Floating rate notes or floaters are most suitable for purchasing and holding until maturity, but if necessary to sell prior to that, a secondary market does exist.

Who Invests in Floaters?

Any investor looking to:

• Diversify a fixed income portfolio in preparation for, or during, a rising interest rate environment.
• Maintain an income stream that follows movements in a given index.

Some Investment Terms...

CPI

CPI Measures the average change in consumer prices for a fixed market basket of goods and clothing, shelter, fuel, transportation, medical care and pharmaceuticals. The CPI is published monthly by the U.S. Bureau, the most widely accepted measure of inflation.

LIBOR

Libor is the base short-term rate of the Eurodollar market, charged by international banks concept to the U.S. Prime Rate.