Senior loans have shown historically solid performance for periods when interest rates are rising. Because the coupons on these loans regularly reset – often as frequently as every 90 days – their prices generally don’t experience the price declines bonds do when rates rise.

A good source of income. For investors starved for income in today’s low rate environment, senior loans can provide the income they can’t find from more conservative investments.

Solid returns in most climates. Senior loans have a good track record of delivering solid total returns through various cycles of rising and falling rates.

Less volatility than high yield bonds or equities. Because of how frequently their coupons reset, senior loans have close to zero duration. Their prices generally don’t fluctuate as much as high yield bonds or equities do, and that price stability can help lessen the volatility of an overall portfolio.

Oppenheimer Senior Floating Rate Fund primarily invests in senior loans issued by companies with leading market share, innovative products, valuable assets and well-regarded management. The team employs a fundamental, bottom-up (security-by-security) investment process to carefully evaluate each potential issuer’s ability to service their debt, with the goal of identifying the most attractively valued opportunities commensurate with their risks.

Read read the full Senior Loans infographic.