Investment that's better than the prime rate?

[Ram Samudrala]

[ This is a repost of the following article: ]
[ From: Ram Samudrala > ]
[ Subject: Investment that's better than the prime rate? ]
[ Newsgroups: misc.invest.mutual-funds ]
[ Message-ID: > ]

I want to know if there's a low-risk mutual fund (or any other
investment device) that is strongly correlated to the prime rate and
produces a return that's equivalent or higher than the prime rate.

The reason is that I can get a home equity line of credit that tracks
at the prime rate (or lower), the interest for which I can deduct from
my taxes (and also reduces my effective tax bracket). Further, I can
put the money from the line of credit in a tax sheltered account and
let it grow tax-deferred. This seems like a smarter thing to do than
to invest the amount I'd pay in interest directly into the
tax-sheltered account. I assuming this'll work out until I hit the
AMT...

So I'm looking for an investment device that is correlated with the
prime rate. In other words, if the prime rate goes up to 10%
(presumably a sign of a strong economy), I'd like my investment to
also be that high or higher.

--Ram