Fund that mainly holds instruments with coupons that reset over time, often used when investors want less fixed-rate duration exposure.
A floating-rate fund is a fund that mainly holds loans, notes, or other instruments whose interest payments reset with a benchmark rate.
Investors often use it when they want income exposure that is less tied to the price behavior of long-duration fixed-rate bonds.
Because coupons can reset upward when benchmark rates rise, floating-rate funds may have lower duration sensitivity than conventional bond funds. That does not make them low risk. Credit quality, liquidity, and spread widening can still matter a great deal.