T. ROWE PRICE LAUNCHES FLOATING RATE EXCHANGE-TRADED FUND
The new fixed income ETF began trading today on
The Floating Rate strategy is constructed similarly to the mutual fund,
- Seeks high current income and, secondly, capital appreciation. The portfolio manager aims to achieve these objectives by investing primarily in BB and B rated loans, which he believes is likely to keep volatility at below-market rates over time.
- Broadly diversified across 200-300 issuers.
- Net expense ratio is 0.61%.
"Floating rate bank loans hold a unique position across the broad fixed income landscape given their combination of a floating rate coupon and elevated placement in a company's capital structure – an important risk management attribute. Historically, bank loans have provided a partial hedge against rising rates as well as low return correlations with other asset classes, making them a solid portfolio diversifier. Bolstered by our close cooperative working relationship with
"Since the debut of
Founded in 1937,
Consider the investment objectives, risks, and charges and expenses carefully before investing. For a prospectus or, if available, a summary prospectus containing this and other information visit troweprice.com. Read it carefully.
ETFs are bought and sold at market prices, not NAV. Investors generally incur the cost of the spread between the prices at which shares are bought and sold. Buying and selling shares may result in brokerage commissions which will reduce returns.
- You may have to pay more money to trade these ETF's shares. These ETFs will provide less information to traders, who tend to charge more for trades when they have less information.
- The price you pay to buy ETF shares on an exchange may not match the value of the ETF's portfolio. The same is true when you sell shares. These price differences may be greater for this ETF compared to other ETFs because it provides less information to traders.
- These additional risks may be even greater in bad or uncertain market conditions.
- These ETFs will publish on its website each day a "Proxy Portfolio" designed to help trading in shares of the ETF. While the Proxy Portfolio includes some of the ETF's holdings, it is not the ETF's actual portfolio.
The differences between this ETF and other ETFs may also have advantages. By keeping certain information about the ETF secret, this ETF may face less risk that other traders can predict or copy its investment strategy. This may improve the ETF's performance. If other traders are able to copy or predict the ETF's investment strategy, however, this may hurt the ETF's performance.
All investments are subject to risk, including the possible loss of principal. The fund is subject to the risks of fixed-income investing, including interest rate risk and credit risk. Interest rate risk is the decline in bond prices that accompanies a rise in the overall level of interest rates. Credit risk is the chance that any of the fund's holdings will have their credit ratings downgraded or will default (fail to make scheduled interest or principal payments), potentially reducing the fund's income level and share price. Transactions involving floating rate loans often involve borrowers whose financial condition is troubled or highly leveraged, which increases the risk that the fund may not receive its proceeds in a timely manner and that the fund may incur unexpected losses in order to pay redemption proceeds to its shareholders. This fund could have greater price declines than a fund that invests primarily in high-quality bonds or loans; the loans and debt securities held by the fund are usually considered speculative and involve a greater risk of default and price decline than higher-rated bonds. International investments can be riskier than
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CONTACT T. ROWE PRICE, PUBLIC RELATIONS: Bill Benintende, 443-248-2424, email@example.com; Kim Francois, 443-687-0249, firstname.lastname@example.org; Lara Naylor, 410-215-7998, email@example.com; Laura Parsons, 443-472-2281, firstname.lastname@example.org; Bill Weeks, 443-422-7297, email@example.com