- Floating rate ("loan") securities have been out of favor for more than a year as investors saw interest rates plummet.
- The loan market looks very compelling relative to high-yield fixed coupon bonds. The avg. price is below par vs. a premium to par for bonds.
- In addition, we capture a double-discount with loan CEFs as the funds are cheap relative the rest of the taxable bond CEF space.
- We like PHD, BSL, BGT, and VCIF for various reasons which we discuss at length below.
For further details see:
CEF Floating Rate Sector Update: Rates Are Rising Which Should Shine A Light On The Sector