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

Asgard

BT Panorama

BT Wrap

Hub 24

Macquarie Wrap

Netwealth

Wealth02

Praemium

Zenith* Recommended (June 2021)

Lonsec** Recommended (August 2021)


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