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Strategies & Market Trends : Value Investing

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To: Wallace Rivers who wrote (40561)	12/14/2010 12:14:17 AM
From: Jurgis Bekepuris	Read Replies (2) of 78673

What I wonder about FRA and VVR (less FRB) and FLC/FFC mentioned on Dale's thread is the leverage. Assuming the rates go up, doesn't the interest expense for the fund go up faster than the rates of securities in it? Maybe that's not true for floating rate funds? Maybe it depends how steep is the yield curve? I still hate the fees in these funds. FRA is cheapest at 1.22%, but even with that you lose ~20% of the yield to fees. It seems all these funds are cap gain trading vehicles and not really yield vehicles. If you don't get cap gains, you're getting subpar yields.

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