AIM Trimark Investments today announced the launch of Canada’s first open-end floating rate mutual fund: Trimark Floating Rate Income Fund.

According to AIM Trimark, the new fund provides the potential for a higher level of current income and offers a strong defence against interest rate risk.

The fund invests in floating rate debt instruments, an asset class available to U.S. investors for over 15 years. A study by Credit Suisse First Boston Corp. estimated the size of the floating rate debt instrument market at $1.2 trillion, as of Sept. 30, 2003, a market larger than the S&P/TSX Composite Index.

Unlike traditional bond funds, AIM Trimark says a floating rate mutual fund can provide more income as interest rates rise. It adds that even when interest rates are not rising, a portfolio of floating rate debt instruments offers investors the potential for a higher yield than traditional short-term debt instruments.

“Trimark Floating Rate Income Fund is an excellent diversifier in a portfolio because of its low correlation to other asset classes,” saod AIM Trimark’s chief investment officer and executive vp, Patrick Farmer, in a release.

The new fund’s portfolio management team, led by industry veterans Rex Chong and Anthony Imbesi, has many years of broad industry experience with specific expertise in the credit-intensive area of corporate bond analysis. They have helped Trimark fixed-income funds post a strong track record of success over the past 10 years.