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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