2024-07-17 09:01:51 ET
Summary
- BDCs offer high yield alternatives to savings accounts.
- 6 key areas to consider when investing in a BDC.
- PFLT's management fees, leverage, asset seniority, credit quality, cost of leverage, and industry diversification are analyzed for investment suitability.
- Poor performance in managing leverage levels and underwriting results means PFLT is ruled out as a long-term buy and hold investment, in my opinion.
About BDCs
Recently, the Fed hiked rates to an eye-popping 5.00% - 5.25% in an effort to combat inflation. This is a boon to investors, who have access to risk free high yield savings accounts that pass on this interest rate to savers. However, this party is not going to last long, as the Fed is eyeing inflation, waiting for it to fall back to ~2-3%, so that it can reduce rates to a meager 2-2.5%. Are there alternative ways to earn a high yield?...
Read the full article on Seeking Alpha
For further details see:
PFLT: Is This 10% Dividend Income Suitable For You