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iShares Treasury Floating Rate Bond ETF (TFLO) at a 52-Week High

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The iShares Treasury Floating Rate Bond ETF (TFLO - Free Report) is probably a suitable pick for investors looking for momentum. TFLO hit a 52-week high and is up from its 52-week low price of $50.25/share.

Let’s take a look at TFLO and its near-term outlook to gauge where it might be headed.

TFLO in Focus

The iShares Treasury Floating Rate Bond ETF seeks to track the investment results of an index composed of U.S. Treasury floating rate bonds. It has AUM of $472.8 million and charges an expense ratio of 15 basis points.

Why the Move?

Considering the consistently hot inflation readings, the central bank has already started tapering bond purchases, which it expects to complete by March. The Fed is expected to begin raising its benchmark interest rate in March. The Federal Reserve may take a more aggressive approach in raising interest rates. In fact, Goldman Sachs is expecting the Federal Reserve to increase interest rates seven times this year, according to a CNBC article.

This has raised the appeal for floating rate bonds. Since the coupons of these bonds are adjusted periodically, they are less sensitive to an increase in rates compared with traditional bonds. This is making funds like TFLO an impressive investment option.

More Gains Ahead?

It seems like the iShares Treasury Floating Rate Bond ETF will remain strong, with a positive weighted alpha of 0.13, which gives cues of a further rally.


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