RT Journal Article
SR Electronic
T1 The Usefulness of Inverse Floaters
JF The Journal of Portfolio Management
FD Institutional Investor Journals
SP 71
OP 80
DO 10.3905/jpm.2000.319740
VO 26
IS 2
A1 David F. Babbel
A1 Cindy W. Ma
A1 Bing J. Ni
YR 2000
UL https://pm-research.com/content/26/2/71.abstract
AB Inverse floaters are sometimes characterized by the popular financial press in unfavorable terms, particularly with respect to their reported role in a number of municipal financial crises during the mid–1990s. In this article, the authors show how inverse floaters can be used in conjunction with government bonds and repo leverage to create attractive risk–return profiles and stable income over a wide variety of economic scenario. Inverse floaters can be particularly attractive during periods of steep yield curves.