Investors Searching for Yield Should Look at Floating Rate Funds

Fixed income investors searching for yield in a low rate environment can find it with floating rate loans, according to Craig Russ, a portfolio manager with Eaton Vance. Floating rate loans are made to medium and large U.S. corporations to fund merger and acquisition activity. Russ says yields on the asset class are currently between 4.5 and 5.5 percent, and the yields will increase in a rising rate environment. Russ co-heads the floating rate loan group at Eaton Vance.