Categories
Investments glossary

Floating Rate Fund Definition

A floating rate fund is a fund that invests in financial instruments paying a variable or floating interest rate. A floating rate fund invests in bonds and debt instruments whose interest payments fluctuate with an underlying interest rate level. Typically, a fixed-rate investment will have a stable, predictable income. However, as interest rates rise, fixed-rate investments lag behind the market since their returns remain fixed.

Click to rate this post!
[Total: 0 Average: 0]

Leave a Reply

Your email address will not be published. Required fields are marked *