Why Invest in Floating Rate Notes

A floating-rate note (FRN) is a bond where the coupon rate is based on a reference rate plus a spread.

FRN's offer investors: 

  • Attractive Yield vs. Risk: Historically have delivered income consistency and lower volatility1
  • Capital Preservation Characteristics: During significant market events, FRN's have exhibited lower drawdowns and maintained liquidity.1
  • A Hedge to Rising Interest Rates: Low sensitivity to monetary tightening because as interest rates rise, the coupon adjusts accordingly.

Pricing in Interest Rate Hikes

Market expectations for monetary tightening in the medium-term has increased. Markets are pricing multiple rate hikes by the Reserve Bank of Australia beginning in 2024. 2

Getting the Right Balance in Your Portfolio

The State Street Floating Rate Fund (the Fund) is a portfolio of high quality, Australian, interest-bearing investments which is actively managed to preserve capital while delivering monthly income. The portfolio average credit quality is A+/A.

The Fund offers the following characteristics:

Yield Enhancement

Capital Preservation and Liquidity

Income Generation

Hedge to Rising Rates

Low Fees

ESG Scoring

View Fund Performance and Holdings  

Enhancing the Investment Process with an ESG Aware Lens

Investors have clearly defined expectations for cash and liquidity strategies centred on capital preservation, liquidity, and yield.  To enhance this, we employ an ESG aware lens in the Fund, because it provides a complementary signal about credit quality.

Our ESG scoring system is called R-Factor™, and it has been incorporated into the Fund’s investment process in two ways.

How to Access

The Fund is available directly or through a number of platforms. 3

Platform Rating Information


BT Panorama

BT Wrap

Hub 24

Macquarie Wrap




Zenith* Recommended (June 2021)

Lonsec** Recommended (August 2021)

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