"I think that floating and variable rate securities will do well in the coming year and it's time to prepare," says income specialist Amy Calistri.

The editor of The Daily Paycheck explains, "As such, in my research I was happy to find Blackrock Floating Rate Income Trust (BGT), a closed-end fund yielding 5.7%, in my research.

"Many floating rate funds concentrated in the financial sector. Fortunately, BlackRock Floating Rate Income Trust is not.

"As an income investor, it's difficult to find solid investments that can protect you from interest rate risk; but JPMorgan Chase Fixed-to-Floating Rate Securities (JPM-Z), which offer a 7.6% variable yield, look like a good candidate," says income expert Amy Calistri.

The editor of The Daily Paycheck explain, "Interest rates are at their lowest levels in history. And for the foreseeable future, the U.S. Federal Reserve is going to keep it that way.

"Until an economic recovery is well in hand, the Fed is going to err on the side of caution and low interest rates. And that's good for existing fixed income securities.

"In our latest report, we focus on floating rate funds, also referred to as bank loan funds. In an era where money market funds are yielding about about zero percent, the two floating rate funds reviewed here sport 30-day yields on either side of 3.5%," says Walter Frank.

The editor of MoneyLetter explains, "They are considered short-term funds, their prices fluctutate (unlike those of money funds), and they carry a higher degree of risk. Recall that most bonds, issued by corporations or governments, have fixed interest rates that do not change for the life of the bond.

"There's a lot more skittishness in the bond market over the direction of interest rates." says bond expert Neil George.

In his The Bond Desk newsletter, the advisor explains, "One way to protect your bond portfolio against rising rates is to consider the floating-rate portion of the market."

Instead of having a fixed-rate, he notes, floating-rate coupons are set or re-set on an ongoing basis, monthly, quarterly, semiannually or annually depending on coupon frequency of the issues.

One of his floating rate favorites is ING Prime Rate Trust (NYSE: PPR), which focuses on the corporate debt of secure borrowers located principally in the US. He notes, "Although it carries the Netherlands-based bank's name, the fund's management is all red, white and blue."

And,he adds, that team has kept the fund consistently in the black with a five-year return running at an annualized 8.2%. Yielding in the mid-7% range and trading at a steady discount to net assets of about 3 percent, he considers ING Prime Rate Trust at the "top of his buy list."