FSLF - CEF Analysis: Senior Loans Look Best Positioned

• The loan space continues to see inflows which should be supportive of NAVs. As NAVs increase, they can increase leverage supporting distributions.
• Loan funds remain one of the cheapest asset classes in the CEF spectrum with five-year z-scores that are barely positive.
• We like KIO and ARDC which are hybrid funds (half loans, half fixed coupon bonds "HY") but they can be a little junkier.
• Another option is that the market is giving us another opportunity to own PHD.  It moved to a -3% discount but has recently retraced a bit back to -6.4%.

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