The Globe and Mail reports in its Tuesday edition that floating rate notes (FRNs) are basically the variable-rate mortgage equivalent of the bond world. Guest columnist Bryce Leung writes that instead of paying a fixed interest rate like regular bonds, FRNs pay a floating interest rate. When interest rates go up, their coupon payment goes up as well, so you get a raise while the fund's price stays relatively steady. If we plot out how these assets behaved during the tumultuous interest rate period between the first quarter of 2022 and the third quarter of 2023, we can see how they compared with other types of funds. An aggregate bond index like iShares Core Canadian Universe Bond Index ETF (XBB) fell 11.8 per cent, which is pretty dramatic for a bond fund. A short-term bond fund like iShares Core Canadian Short Term Bond Index ETF (XSB) still fell, but much less, at 3 per cent. Money market funds like the BMO Money Market Fund ETF Series (ZMMK) gained 5.6 per cent, and floating rate note funds like the iShares Floating Rate Index ETF (XFR) gained 5.8 per cent. If interest rates climb, paying down a variable-rate mortgage, shortening your bond durations and owning floating rate notes are some strategies to consider.