What Is a Senior Floating Rate Fund?

AFT is a leveraged closed-end fund which attempts to

Learn something new every day More Info There can be no assurance that fund objectives will be achieved. When an investor makes a capital commitment to a senior floating rate fund, that capital essentially buys packaged debt sold off by banks or other financial institutions. NAV returns are net of fund expenses, and assume reinvestment of distributions.

Taxable Bond Funds - Loan Participation

The Catalyst/Princeton Floating Rate Income Fund had a one year return of % through December 14, The Fund invests primarily in corporate senior secured floating rate bank loans.

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Past performance is not necessarily indicative of future results. All investments involve risk including the loss of principal. Returns are presented gross of investment management fees and other appropriate fees i. CEFAdvisors shall not be liable for any errors or delays in the content, or for any actions taken in reliance thereon.

Current income and preservation of capital; Senior secured loans. Price Correlation 1yr vs. Click on any value in "Peer Group" rows to see full peer group total returns. Floating rate funds avoid this problem because the interest paid on the debt is dependent upon some interest rate benchmark. If the benchmark rises, the borrowers must pay higher rates, which increase the value of the fund.

While a senior floating rate fund does hold many advantages for investors, there are some negative aspects to this investment security.

Since the fund must be managed, management fees paid by investors can lessen the impact of any potential returns. In addition, the assets in floating rate funds can only be redeemed at certain intervals, meaning that investors looking to cash out in a hurry may have a difficult time doing so. One of our editors will review your suggestion and make changes if warranted.

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