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A Compelling Option Among Bank Loan Funds

T. Rowe Price Institutional Floating Rate's robust team, effective process, great returns, and affordable expenses put it on our radar.

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Kenneth Oshodi: A strong team, solid process, stout returns, and cheap fees make T. Rowe Price Institutional Floating Rate a compelling option among bank loan funds.

Paul Massaro has led the fund as its sole portfolio manager since January 2013. He leads the floating-rate effort for T. Rowe's high-yield group and is supported by a team of 14 dedicated credit analysts. They take a fundamental approach, with a focus on bottom-up security selection and have the flexibility to allocate up to 20% of the portfolio to high-yield bonds, though Massaro has generally kept its allocation in line with its peer group, at 10% or less of assets. The fund has held a few percentage points more than peers in lower-quality CCC and below rated debt when Massaro has found compelling opportunities, but it has shown resilience during periods of market stress. Notably, it lost less than 90% of peers during the high-yield and energy market downturn between June 2015 and February 2016.

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Kenneth Oshodi does not own shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.