Van Eck has launched the Market Vectors Investment Grade Floating Rate ETF, an exchange-traded fund that seeks to track the Market Vectors Investment Grade Floating Rate Index, an index of corporate U.S. dollar-denominated investment grade floating rate notes.
Other floating rate mutual funds invest in low-quality, non-investment grade bank loans, such as senior loans or leveraged loans, Van Eck said.
“Currently, interest rates are very low, causing income investors to sacrifice credit quality or live with the interest rate risk of longer maturity bonds in order to find yield,” said Jan van Eck, a principal of the firm. “The Market Vectors Investment Grade Floating Rate ETF may offer an attractive alternative for conservative investors seeking investment grade quality, lower interest rate risk and attractive income potential relative to other instruments of similar duration.”
With this launch, Van Eck now offers 33 Market Vectors ETFs, seven of which are fixed income.