FLOT: One Of My Favourite Low Duration Instruments

Pearl Gray Equity and Research4.82K FollowersFollow5ShareSavePlay(11min)CommentsSummaryI am bullish on the iShares Floating Rate Bond ETF due to its attractive risk/reward profile in the current rate environment.FLOT offers low duration exposure, mitigating interest rate risk while providing competitive yields compared to liquid cash products and similar short-duration bond ETFs.The ETF's portfolio composition and floating rate structure position it well for regular income with minimal volatility.Despite posing minimal market risk during most market conditions, liquidity events can devalue the ETF significantly. While mean-reversion holds historical significance, its re-occurance is not guaranteed. Douglas Rissing/iStock via Getty Images It's quite a good time to discuss floating-rate vehicles, given the interest rate uncertainty embedded in the current monetary policy cycle. Today's article covers the iShares Floating Rate Bond ETF (FLOT), a low-duration, variable-rateThis article was written byPearl Gray Equity and Research4.82K FollowersFollowPearl Gray is a proprietary investment fund and independent market research firm. Our work on Seeking Alpha covers fixed-income, funds, preferred shares, and opportunistic calls on individual ordinary shares.Platform Author: Steve Booyens CFA, FRMSteve co-founded Pearl Gray in 2020. He doesn't believe in narrative-based decision-making, and therefore focuses on hidden macro, fundamental, and quant variables to identify both investing and trading alpha. He considers emphasis on portfolio risk-return utility and position sizing as essential to achieving success in financial markets. Steve identifies, invests, trades, and writes about financial markets for Peal Gray. Steve and Pearl Gray's articles and comments should not be considered as financial advice. Instead, his/our public commentary functions as a public journal, for track record-keeping.Disclaimer: Kindly note that our published content is dispensed as Independent Analysis and Doesn't Constitute Financial Advice. For any content-related concerns, contact Steve Booyens, CFA, FRM on LinkedIn or leave a message in the comments sectionAnalyst’s Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, but may initiate a beneficial Long position through a purchase of the stock, or the purchase of call options or similar derivatives in FLOT over the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article. Kindly note that our content on Seeking Alpha and other platforms doesn't constitute financial advice. Instead, we set the tone for a discussion panel among subscribers. As such, we encourage you to consult a registered financial advisor before committing capital to financial instruments.Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.