FCRD - BDCs Vs. REITs: Comparing Returns For Higher-Yield Investors

• BDCs continue to easily outperform with only a handful of REITs providing investors with annualized returns of over 10% since 2019.
• Most mortgage REITs and many of the equity REITs have had negative stock price performance over the last 21 months.
• For the same amount of income with less risk, it's better to invest 50% less capital in BDCs at 8.8% compared to equity REITs at 3.0% to 3.5%.
• BDCs have been deleveraging, reducing fixed borrowing rates, shifting portfolios into secured assets in non-cyclical sectors with stronger covenants, and improving net interest margins.
• These changes have resulted in much stronger balance sheets ready for anything from an economic recession to an overheated economy driving inflation and higher interest rates.

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