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  5. XLB: Can you please provide your opinion on what happens to floating rate funds as interest rates drop? [iShares Core Canadian Long Term Bond Index ETF]

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Q: Can you please provide your opinion on what happens to floating rate funds as interest rates drop? Do you get a similar appreciation of the bonds with lower rates. I notice this fund is short duration so curious on your thoughts. YTD up 7% so a reasonable return but noticed in the short term with steeper drops it doesnt seem to perform as well.

Curious if a better play would be a longer duration fixed income fund?
Asked by David on August 30, 2024
5i Research Answer:
Floating rate interest on bonds fluctuates with rates, and thus their trading value is less...
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