American Century Multisector Floating Income ETF (FUSI) seeks to provide high current income through active management of floating-rate debt securities across multiple sectors. This multisector bond ETF invests in bank loans, floating-rate notes, and other variable-rate debt instruments that adjust periodically with interest rate changes.
How It Works
FUSI employs active portfolio management to select floating-rate securities across corporate loans, asset-backed securities, and government-related debt. The fund's managers analyze credit quality, sector allocation, and interest rate sensitivity to construct a diversified portfolio. Holdings are continuously monitored and adjusted based on market conditions, credit fundamentals, and relative value opportunities. The floating-rate nature means coupon payments reset periodically, typically every 30-90 days.
Key Features
- Active management allows tactical positioning across credit sectors and duration management unlike passive floating-rate ETFs
- 4.40% dividend yield provides attractive current income that adjusts higher as interest rates rise
- Recently launched in March 2023, offering institutional-quality floating-rate expertise in ETF format with competitive pricing
Risks
- This ETF can lose value if credit spreads widen during economic stress, as floating-rate bonds still carry default risk despite rate protection
- Active management risk means the fund could underperform passive alternatives if security selection or timing decisions prove incorrect
- Credit risk exposure means potential losses if underlying borrowers default, particularly during recessions when corporate loan defaults typically increase
Who Should Own This
Best suited for income-focused investors with 1-3 year time horizons seeking protection from rising interest rates. Medium risk tolerance required due to credit exposure. Works as satellite holding (5-15% of fixed income allocation) for investors wanting floating-rate exposure without direct loan market complexity.