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High-Yield Floating-Rate ETFs

Definition of 'High-yield floating-rate ETFs'

Floating rate bonds are a unique debt instrument that use two components to arrive at a final yield: a variable component (tied to a reference rate), and a spread. The combination of these two components is the total yield, which will fluctuate (or float) over time.

Investors that are looking to minimize interest rate risk might find a floating rate bond -- or floating rate bond ETF -- attractive. Here are several floating-rate bond ETF options (that vary in yield): iShares Floating Rate ETF, Market Vectors Floating Rate ETF and Eaton Vance Senior Floating Rate Trust.