Floating rate funds have performed well in 2016 despite the fact that interest rates have failed to gain much altitude. George Goudelias, portfolio manager of the RidgeWorth Seix Floating Rate High Income Fund(SAMBX) - Get Report , is enjoying the gains, but becoming a bit more defensive.

"We are peeling some risk off into this rally," says Goudelias. "We are adding more sleep-at-night companies in the aerospace sector, cable sector, lodging sector and tech sector. Cash levels are at the higher end of our most recent range."

The RidgeWorth Seix Floating Rate High Income Fund is up 7.1% thus far in 2016, according to Morningstar. The $4.3 billion fund has returned an average of 2.8% annually over the past three years, outpacing 83% of its rivals in Morningstar's bank loan category. The fund sports a trailing 12-month yield of 4.7%, according to Morningstar.

Leveraged finance had a good first half of 2016. Goudelias said there was a strong rebound from a new issuance standpoint with $86 billion in the second quarter, up from $41 billion in the first quarter. Overall, supply is down 20% year over year, with M&A overtaking refinancing as the primary reason for companies to issue debt.

International demand has been a constant, however, foreigners searching for yield may be getting cautious, according to Goudelias.

"Prices rebounded fairly quickly after Brexit," says Goudelias. "We will continue to see foreign dollars come in, but they may come more slowly as prices keep moving higher.'

The bank loan market saw a continued rebound in several sectors in the first half, with energy being the most notable. Goudelias said the pipeline companies in his portfolio have been "paying down debt religiously" with free cash flow, while the oil service players continue to struggle.

Looking ahead, Goudelias expects broadcasters like Gray Television(GTN) - Get Report and Sinclair Broadcast Group(SBGI) - Get Report to do well in the second half of the year due to increased political spending and the Olympics.