See FRNs.

Floating rate notes are long-term debt securities for which the interest rates are adjusted periodically in line with a benchmark interest rate. FRN's appeal to investors who might otherwise be reluctant to commit funds to fixed interest investments for lengthy periods in times of fluctuating interest rates. Typical investments for a cash unit trust.

A derivative security whose interest rates are pegged to some underlying interest rates or indexes. Most of the floaters used by Vanguard derive their interest rates from either the Fed Funds rate, the Repo rate (or repurchase rate determined by transactions between borrowers and lenders or buyers and sellers of government securities) or LIBOR (the London Interbank Offered Rate.) LIBOR is what high quality international banks charge each other for Eurodollar loans.