With rates around the world at rock bottom and expectation of rise in the United States and United Kingdom building, FRNs are promoted as a way to insulate portfolios from interest rate moves.
This is achieving by the coupon on FRNs changes in line with interest rates, meaning the products have a low degree of price sensitivity to rates and a yield which moves in line with them.
The new ETF is listed on Euronext Paris and is FCA recognised. Amundi plans further listings around main European markets, including the London Stock Exchange.
“Our innovative Floating Rate Notes range is of particular interest in today’s market for investors seeking a source of yield in a low rate environment and a hedge in the event of a rise in EUR and US short term rates,” said Valerie Baudson, Global Head of ETF, indexing and smart beta.
