Potential opportunities in high yield floating rate bonds

7 min read 6 Oct 21

With investors seeking floating rate protection and higher income to protect against tighter monetary policy and inflation, the M&G (Lux) Global Floating Rate High Yield Fund could offer important portfolio diversification for investors in the coming period.

In the following sales note, we explore the current potential opportunities in high yield floating rate notes (HY FRNs), including:

  • lower interest rate risk and volatility than fixed rate HY;
  • potential for capital upside; and
  • technical factors driving demand for the asset class.

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The value of investments will fluctuate, which will cause prices to fall as well as rise and you may not get back the original amount you invested. Past performance is not a guide to future performance.

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