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Fear of Rising Rates Can Sow the Seeds of Bad Behavior

Phillip Yoo, CAIA (Phillip.Yoo@morningstar.com)

Rising interest rates can hurt investors' fixed-income portfolios. In this article, I will examine the case of  PowerShares Senior Loan Portfolio BKLN , which has been a popular choice for investors looking to lessen the risk of rising rates. It is also perhaps the poster child for the futility of investors' efforts to stay a step ahead of the Fed. I will also explore other options from the menu of fixed-income exchange-traded funds, and beyond, that might help investors better manage interest-rate risk in their portfolios.