When market rates rise, the expected coupons of the FRN increase in line with the increase in forward rates, which means its price remains constant.
This dedication to giving investors a trading advantage led to the creation of our proven Zacks Rank stock-rating system. These returns cover a period from and were examined and attested by Baker Tilly, an independent accounting firm. Visit performance for information about the performance numbers displayed above. Skip to main content. How to Convert Bond Price to Yield. Video of the Day. References 2 Breaking Down Finance: Floating Rate Bond Valuation Investopedia: Resources 2 Investing in Bonds: Floating-Rate Securities Raymond James: Exchange Toronto Stock Exchange.
Asset Class Fixed Income. Units Outstanding as of Jan 8, 39,, Number of Holdings as of Jan 7, Price The Closing Price is the price of the last reported trade on any major market. Participation by individual brokerage can vary. Eligible for Registered Plans Yes. Distribution Frequency How often a distribution is paid by the fund.
The most common distribution frequencies are annually, biannually and quarterly. Last Distribution per Share as of Dec 20, 0. Distribution Yield The annual yield an investor would receive if the most recent fund distribution stayed the same going forward.
The yield represents a single distribution from the fund and does not represent the total return of the fund. The yield is calculated by annualizing the most recent distribution and dividing by the fund NAV from the as-of date.
This figure is net of management fees and other fund expenses. The measure does not include fees and expenses. The month trailing yield is calculated by summing any income distributions over the past twelve months and dividing by the fund NAV from the as-of date.
Weighted Avg Coupon Weighted Average Coupon is the average coupon rate of the underlying bonds in the fund, weighted by its relative size in the portfolio.
Effective Duration adjusts for changes in projected cash flows as a result of yield changes, accounting for embedded optionality. Weighted Avg Maturity Weighted Average Maturity is the length of time until the average security in the fund will mature or be redeemed by its issuer. Longer average weighted maturity implies greater volatility in response to interest rate changes.
This metric considers the likelihood that bonds will be called or prepaid. A, the annual fee payable by the fund to BlackRock Canada for acting as trustee and manager of the fund. Risk Rating Risk Rating All investments involve risk. The value of the fund can go down as well as up and you could lose money. Thus, FRNs differ from fixed rate bonds, whose prices decline when market rates rise. As FRNs are almost immune to interest rate risk, they are considered [ by whom?
The risk that remains is credit risk. Securities dealers make markets in FRNs. They are traded over-the-counter , instead of on a stock exchange. In Europe, most FRNs are liquid, as the biggest investors are banks. In the wholesale markets, FRNs are typically quoted as a spread over the reference rate.
If a trade is agreed, the price is calculated. This can be calculated as par, minus the difference between the coupon and the price that was agreed 0. The simple margin is a measure of the effective spread of a FRN that is not traded at par. If the FRN trades at par, the simple margin will equal the quoted spread. To calculate the simple margin, first compute the sum of the quoted spread of the FRN and the capital gain or loss a investor will earn if the FRN is held to maturity:. Second, adjust the above for the fact that the FRN is bought at a discount or premium to the nominal value:.
A more complex measure of the effective spread is a discount margin , which takes into account the "time value of money" of the FRN cash flows.