As referenced in the September Portfolio Update, I’m favoring fixed-to-floating shares over fixed-rate shares. The run higher in Treasury yields over the last few months resulted in adjustments to price targets. We’ve seen the market looking favorably on shares that are already floating or getting close to their floating date.
These trades were designed to reduce exposure to fixed rates and increase exposure to floating rates. That isn’t because I expect rates to soar higher in the future. It is because the fixed-rate shares did reasonably well while rates were ripping higher.