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."

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Floating rate funds: Protection from rising rate originally appeared on BloggingStocks on Fri, 20 Jul 2007 09:29:00 EST. Please see our terms for use of feeds.