Floating Rate Income Fund: Time to Reconsider

BlackRock Floating Rate Income Strategies Fund (FRA) is a closed-end fund that aims to provide attractive total returns and a high level of income from its portfolio of floating rate securities. Despite its target, the fund's performance has been underwhelming, and its time as a viable investment may have passed. With a yield that is lower than its peers and a lackluster track record, investors may want to reconsider FRA as a viable option.

Singapore-based investment company Temasek has announced the issuance of two-year fixed rate and two-year floating rate US dollar bonds. The bonds are being issued by Temasek Financial (I), a wholly-owned subsidiary, under its US$25 billion guaranteed global medium-term note programme [1].

The bonds, which will be offered in the US, UK, and Europe to qualified buyers, are unconditionally and irrevocably guaranteed by Temasek. The net proceeds from the issuance will be used to fund Temasek's and its investment holding companies' ordinary course of business. Temasek's overall corporate credit rating, as assigned by Moody's Investors Service and S&P Global Ratings, is "Aaa" and "AAA" respectively [1].

This issuance is significant as it highlights Temasek's continued focus on diversifying its funding sources and maintaining its strong financial health. The bonds are expected to be listed and quoted on the official list of the Singapore Exchange Securities Trading.

For investors seeking high income solutions, closed-end funds (CEFs) have become a popular choice. CEFs offer the potential for higher regular income than many other types of investment products. Nuveen, a leading provider of CEFs, has been offering these funds for over 35 years, providing resources to help clients build lasting income [2].

However, for funds like the BlackRock Floating Rate Income Strategies Fund (FRA), which aims to provide attractive total returns and high income from its portfolio of floating rate securities, performance has been underwhelming. Despite its target, FRA's yield is lower than its peers, and its track record has been lackluster. Investors may want to reconsider FRA as a viable option due to its underperformance and lower yield [3].

References:
[1] https://www.businesstimes.com.sg/singapore/temasek-financial-launches-2-year-fixed-floating-rate-us-dollar-bonds
[2] https://www.nuveen.com/en-us/insights/closed-end-funds/learn-more
[3] https://www.blackrock.com/investments/funds/blackrock-floating-rate-income-strategies-fund