FLOT: A Zero-Duration Fixed Income ETF with Limited Credit Risks

The iShares Floating Rate Bond ETF (FLOT) is a zero-duration fixed income ETF that offers limited credit risk, with most ratings around A. The ETF has no duration risk, meaning it is insensitive to interest rate changes. FLOT is a dollar bet that provides investors with a stable income stream.

The iShares Floating Rate Bond ETF (FLOT) is a zero-duration fixed income ETF that offers limited credit risk, with most ratings around A. The ETF has no duration risk, meaning it is insensitive to interest rate changes. FLOT is a dollar bet that provides investors with a stable income stream. This makes it an attractive option for investors seeking reliable income in an uncertain market environment.

The ETF is designed to track the ICE BofA 1-3 Year US Floating Rate Index, which is composed of investment-grade floating rate notes with maturities of 1 to 3 years. This index aims to provide investors with exposure to floating rate securities that are sensitive to interest rate movements but offer a high degree of credit quality.

One of the key benefits of FLOT is its low credit risk. The ETF invests primarily in bonds rated A or higher, which are considered to be of high credit quality. This helps to mitigate the risk of default and ensures that investors receive a steady stream of income. Additionally, the floating rate structure of the bonds ensures that the ETF's income stream will increase as interest rates rise, providing investors with a hedge against inflation.

Another advantage of FLOT is its low expense ratio. The ETF has an expense ratio of 0.20%, which is relatively low compared to other fixed income ETFs. This means that investors can keep more of their income and reduce the impact of fees on their overall returns.

In a recent announcement, the Bank of England kept its main UK interest rate at a 2-year low of 4.25% [2]. This decision reflects the ongoing efforts to stabilize the economy and support growth. In this context, FLOT's zero-duration structure and high credit quality make it an appealing choice for investors seeking a stable income stream.

In conclusion, the iShares Floating Rate Bond ETF (FLOT) is a solid option for investors looking to generate stable income in volatile markets. With its low credit risk, low expense ratio, and zero-duration structure, FLOT offers a reliable income stream that is well-suited to the current economic environment. Investors should consider the investment objectives, risks, charges, and expenses before investing. For a prospectus or summary prospectus with this and other information about the Fund, please call 1-800-617-0004 or visit our website at www.fminvest.com. Read the prospectus or summary prospectus carefully before investing.

References:
[1] https://www.businesswire.com/news/home/20250415580982/en/Fm-Investments-Launches-High-Yield-ETF-Focused-on-Top-100-Issuers-ZTOP
[2] https://abcnews.go.com/Business/wireStory/bank-england-main-uk-interest-rate-2-year-123002605