FR/BL funds - FFRHX

[alvinthechipmunk]

chang, your move to FFRHX looks smart, within that category. In Floating rate, mine is PRFRX. But checking monthly pay-outs, FFRHX is spinning off a lower amount, consistently.

[chang]

Jan 14, 2022 7:52:04 GMT alvinthechipmunk said:

chang , your move to FFRHX looks smart, within that category. In Floating rate, mine is PRFRX. But checking monthly pay-outs, FFRHX is spinning off a lower amount, consistently.

I hope so. The "obvious" thing is very rarely smart!

In honesty, I didn't conduct an exhaustive comparison of BL/FR funds. A quick search and filtering showed the Fido fund to be one of the more stolid and conservative ones, not as pricey as some others, and being in a Fido account it is convenient to own.

[FD1000]

Jan 14, 2022 7:52:04 GMT alvinthechipmunk said:

chang , your move to FFRHX looks smart, within that category. In Floating rate, mine is PRFRX. But checking monthly pay-outs, FFRHX is spinning off a lower amount, consistently.

I have been posting about BL/FL for over a year. When rates are going up, BL is usually a good category.  When the Fed tell you they are going to raise rates 3-4 time in 2022...BL is typically a good category.
There are several good options in BL: "less risky" PRFRX,SAMBX,PLFDX. "higher risk" FFRHX,OOSAX,EIFAX. It's difficult to predict the future, higher/lower risk is based on my crystal ball biased analysis. As a trader, I typically own the best performing risk/reward funds.

[Deleted]

I don't really get it. Distressed companies who don't have access to traditional debt markets use FR/BL financing. Rising rates put said companies under even more financial stress, so risk of default rises right along with rates. No free lunch.

Remember Schwab Yield Plus?

[yogibearbull]

ST-HY and FR/BL are different.

True, FR/BL are for companies that cannot tap the bond market. But these companies are willing to pay adjustable rates because those are lower than fixed rates available to them. Investors in FR/BL do fine so long as rates go up. But FR/BL act just as ST-HY when rates are flat or down. These are not to be confused with Treasury floaters (FRNs) that have NO credit risks.

Both ST-HY and FR/BL need good economy and both are decimated by recessions.

Ultra-ST bonds funds of earlier era (pre-Financial Crisis; from Fido, Schwab, etc) were poorly designed as ST-HY and mis-sold as safe. ST-HY have high rollover risks and that is what killed then in 2008-09. Ultra-ST bond funds of today are a new generation (post-Financial Crisis) that is investment-grade.

So, there should be no confusion now among the risky ST-HY, FR/BL, and safer ultra-ST (but very low yielding).

[anitya]

Market is overreacting / overestimating Duration effects and under reacting / underestimating Credit conditions.

[Chahta]

Jan 14, 2022 16:27:35 GMT yogibearbull said:

ST-HY and FR/BL are different.

True, FR/BL are for companies that cannot tap the bond market. But these companies are willing to pay adjustable rates because those are lower than fixed rates available to them. Investors in FR/BL do fine so long as rates go up. But FR/BL act just as ST-HY when rates are flat or down. These are not to be confused with Treasury floaters (FRNs) that have NO credit risks.

Both ST-HY and FR/BL need good economy and both are decimated by recessions.

Ultra-ST bonds funds of earlier era (pre-Financial Crisis; from Fido, Schwab, etc) were poorly designed as ST-HY and mis-sold as safe. ST-HY have high rollover risks and that is what killed then in 2008-09. Ultra-ST bond funds of today are a new generation (post-Financial Crisis) that is investment-grade.

So, there should be no confusion now among the risky ST-HY, FR/BL, and safer ultra-ST (but very low yielding).

UST has been horrible for 4 months. ICSH and GSY have tanked. I could not stomach them no longer.

[fritzo489]

"Remember Schwab Yield Plus?"  Yes I do !!!!!

[mozart522]

I have been using SRLN for senior loans for some time. Happy with it for now.

[Chahta]

SRLN looks good