NEW YORK (TheStreet) -- Interest rates have nowhere to go but up, says Robert Dial, manager of the MainStay Floating Rate Fund (MXFAX). That's why he advises investors to allocate assets to floating rate securities that periodically adjust their payouts.The mutual fund has returned 6.5% in 12 months, according to Morningstar ( MORN). Over the past five years, the fund has returned an average of 4% annually, outperforming three-quarters of its Morningstar peers.
You also own the chemical company Ineos. What is attractive about this issue? Dial: Ineos and the chemical industry, in general, took a real hit when the economy unraveled a few years ago. We like the operating metrics of this business. We bought more when the economy fell off. It's shown a tremendous price appreciation in our fund, really showing alpha. Plus, it has a very rich coupon. Sadly, its nearing its maturity date and is likely to be called away. But I'm sure we will find something good to replace it. -- Reported by Gregg Greenberg in New York.
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