TPVG - BIZD: The Least Risky Way To Maintain BDC Exposure
2024-06-25 09:49:02 ET
Summary
- VanEck's BDC Income ETF is a great way to maintain a diverse exposure to the Business Development Company sector.
- BIZD's currently dividend yield sits at 10.5% and is comprised of both net investment income and net realized gains from its holdings.
- While interest rate cuts may lead to reduced distributions because of lowered NII per share, the increased volume of borrowers may offset this and boost performance.
- A downside is that BIZD may not allow you to partake in the supplemental distributions that holding individual BDCs may have.
Overview
The rapid hiking of interest rates was a great experience for me because it taught me how valuable of a sector that Business Development Companies can be for providing reliable income. I previously covered VanEck's BDC Income ETF ( BIZD ) in my last article titled: ' BDC Are Still Great For 2024 '. In that article, I discussed how BIZD was a great option for a 'higher for longer' interest rate environment where interest rates remained elevated. While the Fed has still not started to cut rates, there are some early indicators that suggest rate cuts may be on the horizon. I want to provide some thoughts on why BIZD may also be a great choice for an environment of lower interest rates....
BIZD: The Least Risky Way To Maintain BDC Exposure